Tesla Inc has suspended the use of bitcoin to purchase its vehicles because of climate concerns, Chief Executive Officer Elon Musk said in a tweet on Wednesday, reversing the company's stance in the face of an outcry from some environmentalists and investors.
Bitcoin, the world's biggest digital currency, fell more than 7% after the tweet and was trading at $52,669. Tesla Inc revealed in February it had bought $1.5 billion of bitcoin and would soon accept it as payment for cars, driving a roughly 20% surge in the world's most widely held cryptocurrency.
Musk on Wednesday said Tesla would not sell any bitcoin and intends to use bitcoin for transactions as soon as mining transitions to more sustainable energy.
"We are also looking at other cryptocurrencies that use <1% of bitcoin's energy/transaction," Musk said.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Musk said in March Tesla that customers can buy its electric vehicles with bitcoin.
However, the company’s decision was criticized by environmentalists as they saw Tesla’s move could turbo-charge the global use of cryptocurrencies. They view that mining cryptocurrency caused pollution as it used fossil fuel to mint Bitcoin. Musk faced severe backlash for supporting Bitcoin, despite projecting himself as an evangelist for clean energy.
The inclusion of cryptocurrency in Tesla’s investment portfolio could also complicate the company’s zero-emissions ethos, Reuters noted in a report. Musk has also been influential in popularising another cryptocurrency, the meme-based Dogecoin. Just two days before his announcement, he asked Twitter users whether Tesla should accept Dogecoin as a form of payment, to which over 78% of respondents said yes.
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