Elon Musk Says Tesla Is Suspending Bitcoin Payments Over Environmental Concerns

However, Tesla will not be selling any of its bitcoin anytime soon.

AccessTimeIconMay 12, 2021 at 10:10 p.m. UTC
Updated Sep 14, 2021 at 12:54 p.m. UTC

In a tweet Wednesday, Tesla CEO Elon Musk said the electric-car company is discontinuing bitcoin payments.

Tesla had announced it was accepting BTC for car payments starting in February. The announcement came in concert with a $1.5 billion investment in bitcoin as a treasury asset.

Musk has since continued his championship of DOGE, the meme currency currently boasting a market cap of $58 billion, according to CoinDesk data.

Cryptocurrency “cannot come at great cost to the environment,” the electric carmaker said in a statement tweeted by Musk. The statement was hedged, but only slightly, with praise for crypto’s “promising future” and a promise to investigate less energy-hungry networks than Bitcoin’s.

Bitcoin, a proof-of-work (PoW) blockchain reliant on energy-intensive mining units, has come under fire from environmental groups as its price has surged to all-time highs. The second-largest cryptocurrency by market cap, ether, also relies on PoW but is in the process of switching to proof-of-stake.

Tesla's pledge turns up the heat on the race to move bitcoin away from fossil fuels. The company's decision to accept bitcoin was a watershed moment for corporate bitcoin adoption. Tesla's turnabout on environmental matters will likely give fuel to the social and even political moment clamoring for change to the world’s largest cryptocurrency by market cap.

The sudden freeze of Tesla’s bitcoin payments hands a decisive win to bitcoin’s energy critics. But it does not spell doom for Tesla’s remaining bitcoin investment nor its crypto experiment. “Tesla will not be selling any bitcoin,” the statement read. “We intend to use it for transactions as soon as mining transitions to more sustainable energy."

No such plans are publicly known. The most reputable report on the matter says nearly 40% of bitcoin’s energy consumption was carbon-neutral.

Tesla did test the liquidity of the bitcoin market with a $272 million sell announced during its most recent earnings call.

Bitcoin's price is now down nearly 6% over the past 24 hours, though it fell about $2,000 after Musk's tweet.

This is a developing story and will be updated.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Three Arrows Paper Trail Leads to Trading Desk Obscured Via Offshore Entities

As Three Arrows Capital collapsed under market pressure, its much-lesser known trading desk, TPS Capital, remained active, sources say. But a complex ownership structure might frustrate creditors' efforts to collect.

CoinDesk - Unknown
2
CoinDesk - Unknown
June Was Bitcoin’s Worst Month Ever

Plus, European crypto regulation comes into view.

CoinDesk - Unknown
3
CoinDesk - Unknown
What Traders Are Saying About Bitcoin's Biggest Monthly Loss in 11 Years

Poor macroeconomic sentiment, fears of inflation and systemic risks from the crypto market pushed the cryptocurrency below 2017’s highs.

CoinDesk - Unknown
4
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown