Since March 2021, e-car manufacturer Tesla has accepted the cryptocurrency Bitcoin as a means of payment. But now the company is backing out. The Bitcoin price plummeted abruptly.
Tesla CEO Elon Musk is considered a big fan of cryptocurrencies. With his tweets, he often even influences the price development. After Musk only recently approved the cryptocurrency Bitcoin as a means of payment at Tesla, the company is now doing an about-face and suspending the payment method until further notice.
Via Twitter, Musk announced that Tesla is doing without the cryptocurrency with immediate effect.
He cited climate protection reasons and the payment system’s high power consumption as the reason. The transaction provider’s high consumption of fossil fuels is a cause for concern, Musk said.
Bitcoin price crashes after Tesla retraction
Elon Musk’s tweet caused the price of the cryptocurrency to plummet abruptly – from $54,817 to $45,700. However, the decision is by no means final. Musk announced that he would accept Bitcoins as a means of payment again in the future as soon as they were produced using sustainable energy.
Until then, Tesla will also no longer trade with the cryptocurrency. In the current fiscal quarter, the automaker generated about $100 million from Bitcoin trading. However, according to Musk, Tesla does not want to resell the recently purchased Bitcoins at a price of around 1.5 billion US dollars for the time being.
Cryptocurrencies have a poor carbon footprint
The debate about the environmental footprint and energy efficiency of cryptocurrencies is by no means new. Bitcoin has come under increasing criticism due to its high power consumption, which is required for the production of the currency units in mining by energy-intensive high-performance computers.
According to the Bitcoin Energy Consumption Index published by the online magazine Digiconomist, which also advocates for more environmentally friendly technologies, Bitcoin currently consumes about as much energy as the Netherlands. The currency’s carbon footprint is roughly equivalent to that of Singapore.
Bitcoin fans, on the other hand, argue that the environmental balance should be better in the long run with the expansion of renewable energies. However, many server farms that are needed for mining are located in countries with relatively low electricity costs – for example, in China or Kazakhstan.
However, the energy there often comes from comparatively environmentally harmful energy sources such as lignite-fired power plants.