Tesla's U-turn on Bitcoin payments sparks $365 billion sell-off in crypto market
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 said.
May 13, 2021 / 11:34 AM IST
The crypto market dropped over $365 billion in market-capitalisation after Tesla CEO Elon Musk tweeted that the carmaker is suspending the use of bitcoin to purchase its vehicles citing environmental concerns.
At the time of the announcement, the value of the whole cryptocurrency market stood at around $2.43 trillion. It dropped to $2.06 trillion, wiping off around $365.85 billion. Since then, the market has recouped some losses and is currently valued at about $2.27 trillion.
At the time of writing this copy, bitcoin prices were down over 11 percent, ethereum (8 percent), binance coin (8 percent), dogecoin (10 percent), XRP (10 percent), according to data from Coinmarketcap.com.
Read: Tesla stock & bitcoin drop as Musk reverses course on accepting crypto for vehicles over climate concerns
"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 said.
Musk in March said that Tesla customers can buy its electric vehicles with bitcoin.
On Wednesday, Musk said Tesla would not sell any bitcoin and intends to use bitcoin for transactions as soon as mining transitions to more sustainable energy.
"We are also looking at other cryptocurrencies that use <1 percent of bitcoin's energy/transaction," Musk said.
"Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment," he added.