Bitcoin slips below $50k after Musk says Tesla won't accept it

Associated PressUpdated: Thursday, May 13, 2021, 08:56 PM IST
article-image
Tesla CEO Elon Musk | AFP Photo

The price of bitcoin fell below $50,000 Thursday morning after Tesla CEO Elon Musk tweeted a day earlier that the electric car maker would stop accepting the digital currency as payment for its vehicles.

Musk on Wednesday cited environmental concerns for the change in policy.

"We are concerned about rapid increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel," Musk said on Twitter. He added that cryptocurrency is a "good idea on many levels" but its promise cannot come at a "great cost to the environment." He also said that Tesla won't be selling any of the Bitcoin it owns.

The price of bitcoin slipped to $49,880 in morning trading Thursday, the first time it's been below $50,000 since early March. Tesla shares were poised for gains early Thursday after falling 4.4% on Wednesday.

Tesla said in February that it had invested around $1.5 billion in Bitcoin and it planned to begin accepting the digital currency as payment "soon". The fair market value of Tesla's Bitcoin holdings as of March 31 was $2.48 billion, according to securities filings.

Bitcoin relies on computers, which rely on electricity, to exist. The number of computers and the energy needed to power them is rising - the growing value of bitcoin is directly tied to the amount of energy it uses.

Bitcoin miners unlock bitcoins by solving complex, unique puzzles. As the value of bitcoin goes up, the puzzles become increasingly more difficult, and it requires more computer power to solve them. Estimates on how much energy Bitcoin uses vary.

A 2019 study by researchers at the Technical University of Munich and the Massachusetts Institute of Technology concluded that, in late 2018, the entire bitcoin network was responsible for up to 22.9 million tons of CO2 per year - similar to a large Western city or an entire developing country like Sri Lanka.

Total global emissions of the greenhouse gas from the burning of fossil fuels were about 37 billion tons last year.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

5th Test: Cheteshwar Pujara scores gritty 50 as India reach 125-3 against England on Day 3 to lead...

5th Test: Cheteshwar Pujara scores gritty 50 as India reach 125-3 against England on Day 3 to lead...

Warm-up match: All-round Harshal Patel stars in India's 10-run victory over Northamptonshire

Warm-up match: All-round Harshal Patel stars in India's 10-run victory over Northamptonshire

Mumbai: Wife gets anticipatory bail in cash-for-job scam

Mumbai: Wife gets anticipatory bail in cash-for-job scam

Speaker’s Election: Ruling & Opposition members take dig against each other

Speaker’s Election: Ruling & Opposition members take dig against each other

ED summons former Mumbai CP Sanjay Pandey in connection with NSE co-location scam

ED summons former Mumbai CP Sanjay Pandey in connection with NSE co-location scam