The value of bitcoin suddenly dipped on Wednesday, sapping billions from the cryptocurrency market.
The apparent cause? An Elon Musk tweet.
The Tesla chief announced Wednesday that the electric car company would no longer accept bitcoin, reversing course three months after he pledged to start taking the cryptocurrency as payment. Musk also said Tesla would not sell its own bitcoin until the currency’s “miners” turned to greener sources of energy to power the computers needed to process transactions and create new coins.
“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 in a statement. “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.”
In February, Musk announced that Tesla had invested $1.5 billion in bitcoin and said the company would start accepting bitcoin payments, setting off a flurry of criticism from environmental advocates concerned about the energy consumption and carbon emissions associated with the cryptocurrency. Bitcoin’s value received a notable bump after Musk revealed Tesla’s investment.
On Wednesday, the cryptocurrency market again reacted swiftly to Musk’s reversal.
When he posted a statement on Twitter around 3:06 p.m. in California, the value of a bitcoin was about $54,600. Two hours later, it hit its low point for the day at $46,980, according to data from Coinmarketcap.com. The value recovered a bit, rising to a little over $50,000 by the end of the day.
Although the dip caused some people to sell, many bitcoin defenders pointed out that the currency has seen steep crashes in the past — including at the beginning of March and April — and has recovered. In fact, bitcoin’s value surpassed $50,000 for the first time in February amid a record climb that started in 2020.
