May 13, 2021
SnapBots News Review: Tesla Suspends Bitcoin Payments over Environmental Concerns
Bitcoin plunged, as much as 15%, sinking to as low as $46,045 after Tesla’s Musk suspends Bitcoin payments due to the said cryptocurrency’s mining’s environmental impact.
In a post on Twitter Wednesday, Musk expressed his concern over “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” He also said the company won’t be selling any of the Bitcoin it holds and that Tesla might accept other cryptocurrencies if they use <1% of Bitcoin’s energy/transaction.
Cryptocurrency “cannot come at great cost to the environment,” the electric carmaker said in a statement tweeted by Musk. The statement was hedged, but only slightly, with praise for crypto’s “promising future” and a promise to investigate less energy-hungry networks than Bitcoin’s.
The knock-on effects spread to stocks worldwide that are linked to Bitcoin. According to Bloomberg News, Coinbase Global Inc. fell 4.8% in US post-market trading. Microstrategy Inc, which has put billions of dollars of its assets into Bitcoin, plunged 9.2% aftermarket, while Jack Dorsey’s Square Inc. also dropped.
Musk’s tweet on Wednesday took many in the cryptocurrency community by surprise, including Nic Carter, a partner at Castle Investment Management, and a leading voice among defenders of Bitcoin’s energy use.
Musk’s move is a step in the wrong direction for Bitcoin bulls as well as for stock investors betting on the digital currency. It’s unclear what prompted the decision.
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