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Tesla removes Bitcoin as payment option and Bitcoin price tanks

Photo of: Joseph Stone
by Joseph Stone

Elon Musk has dropped a bombshell on the cryptocurrency market. For environmental reasons, Tesla is no longer accepting payments from its customers in Bitcoin.

The cryptocurrency market is in deep decline, dragged down once again by the fall of Bitcoin. The first of the cryptos is losing more than 10%. It was even giving up 6% in the space of just one hour.

The trigger is the announcement made by Tesla. Since the 1st quarter, the car manufacturer accepted purchases by its customers in BTC. This payment option is no longer available. Elon Musk himself announced this on Twitter.

“We are concerned about the rapid increase in the use of fossil fuels for bitcoin mining and transactions, particularly coal, which has the worst emissions of any fuel,” justifies the Tesla CEO.

The consequences for the Bitcoin price are immediate. A sharp drop. As for Tesla, it is caught up in its image as an environmentally conscious company. This image was difficult to reconcile with the use of BTC.

With its Proof of Work consensus, the Bitcoin blockchain is indeed very energy intensive and therefore causes significant CO2 emissions. Tesla therefore favors its image, at the expense of the queen of cryptocurrencies.

However, the company is not breaking with Bitcoin for good. First of all, the company retains its capital in BTC, estimated at more than two billion dollars and included in its financial balance sheet.

Tesla is also leaving the door open for a return to Bitcoin payments. But with certain conditions though. “Tesla will not sell Bitcoin and we intend to use it for transactions as soon as we transition mining to more sustainable energy,” writes Elon Musk.

On the other hand, the automaker may accept other cryptocurrencies as payment methods in the future. The company reports that it is looking at other crypto with a better carbon footprint (less than 1% of the consumption of BTC transactions).

Will it be Dogecoin? A few days earlier, as the scenario of abandoning BTC was undoubtedly brewing within Tesla, Musk launched a poll on Twitter. The question: should the manufacturer accept DOGE? The answer was a resounding yes with over 70%.