Elon Musk says Tesla will no longer accept Bitcoin due to climate change concerns

13 May 2021, 11:04

Tesla CEO Elon Musk has announced that vehicle purchases using Bitcoin have been suspended, owing to climate change concerns.

Taking to Twitter on Wednesday, Musk shared an official statement with his 54.2million followers, which read: "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 added: "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 also stated that Tesla would not sell any of its Bitcoin until mining “transitions to more sustainable energy”.

Since the announcement, Bitcoin fell by almost 17%. Tesla shares also took a hit.

The decision comes after the electronic car company was met with backlash from environmentalists and investors, after declaring in March it would accept the cryptocurrency. This drove about a 20% surge in Bitcoin.

Prior to that in February, Tesla revealed that it had bought $1.5billion of Bitcoin.

According to research by the University of Cambridge and International Energy Agency, Bitcoin “mining” consumes the same amount of energy annually as the Netherlands did in 2019.

Edward Moyra, a senior market analyst at OANDA said on Wednesday: “The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market.

“Over the past couple of months, everyone disregarded news that bitcoin uses more electricity than Argentina and Norway.”

Speaking to The Independent, Charles Hoskinson, CEO of IOHK, commented: “Bitcoin’s energy consumption has more than quadrupled since the beginning of its last peak in 2017 and it is set to get worse because energy inefficiency is built into bitcoin’s DNA.”