The price of Bitcoin has dipped more than 7% after CEO of Tesla, Elon Musk tweeted the suspension of bitcoin as a payment option for its vehicles.
Responding to Bitcoin’s dip, alts tumbled with prices of some coin dipping more than 30%.
The development came just hours after Elon Musk asked the Twitter community if they would like Tesla to accept dogecoin as a means of payment.
Musk attributed reason behind the halt to concerns about the use of fossil fuel for bitcoin mining.
As Bitcoin has scaled new heights this year, climate activists have been raising the alarm over the substantial amounts of energy consumed by Bitcoin mining. That is when mining rigs comprising powerful computers – sometimes thousands of them labouring in unison – race to verify Bitcoin transactions to win new coins.
Bitcoin mining consumes as much electricity annually as the entire country of Argentina, researchers at the University of Cambridge estimate, with China accounting for some 65 percent of Bitcoin mining globally.
That carbon footprint is at odds with Musk’s support for clean energy. But he is not giving up on Bitcoin.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk wrote on Wednesday.
The Tesla and SpaceX chief is a fervent supporter of cryptocurrencies and has inspired big market-moving swings in the prices of digital coins this year, including Bitcoin and Dogecoin.
In January, Bitcoin surged when Musk posted #bitcoin to his Twitter feed. His Midas crypto touch was unleashed again in February after Tesla disclosed in regulatory filings that it had bought $1.5bn of Bitcoin and that people could use the cryptocurrency to buy Tesla’s electric vehicles.
Tesla revealed in February it had bought $1.5bn of bitcoin, before it began accepting it as payment for cars in March, driving a roughly 20% surge in the world’s most widely held cryptocurrency.
On Wednesday, Edward Moya, a senior market analyst at currency trading firm OANDA, said that Musk was getting ahead of investors focused on sustainability. “The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market,” Moya said. “Over the past couple of months, everyone disregarded news that bitcoin uses more electricity than Argentina and Norway.”
In an “emergency press conference”, sometimes crypto trader and Barstool Sports founder, Dave Portnoy, asserted that Musk “just tried to tank Bitcoin,” stating: “[Musk] has been pulling the levers like the Wizard of Oz on crypto, and everyone’s following his every move — he’s sending Dogecoin up, he’s sending Bitcoin down, this is bullshit […] Elon, you have a responsibility when one second you say to buy something, and the next second you don’t – that’s playing with people’s futures and their fortunes.”