The price of bitcoin crashed after Elon Musk’s Tesla suspended the use of the crypto as payment over environmental concerns. Musk said that the decision had been made because of the vast amount of energy used by the crypto.
He added that he still thought cryptocurrency “is a good idea on many levels”, that Tesla would use bitcoin again if its energy became cleaner, and that it would explore other digital currencies. However. for now, Tesla would switch back to only taking conventional payments.
The announcement immediately led bitcoin to fall to almost 12 percent over the past 24 hours, wiping more than $100 billion off its value. The price was around $48,500, according to Coin Metrics data, its first time below the $50,000 since Apr. 24.
Recall that in February, Tesla announced in a regulatory filing that it had purchased $1.5 billion worth of bitcoin and planned to accept the cryptocurrency for payments.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
The crypto is not issued by a single entity like a central bank. Instead, it is maintained by a network of “miners.”
These miners use purpose-built computers that require a lot of energy to solve complex mathematical puzzles in order for bitcoin transactions to go through. The crypto’s energy consumption is larger than some individual countries. Other cryptocurrencies ether and XRP were also significantly lower.
Musk has been a huge fan of digital currencies including bitcoin and dogecoin, helping to drive their prices higher in recent months.
Working with Doge devs to improve system transaction efficiency. Potentially promising.
— Elon Musk (@elonmusk) May 13, 2021
Amidst the bitcoin and cryptocurrency turmoil, Musk still tweeted that he was working with dogecoin developers to improve system transaction efficiency. He completed his tweet by saying potentially promising.
