Elon musk, CEO of Tesla, said Wednesday on Twitter that Tesla has “suspended the purchase of Tesla vehicles with Bitcoin”, out of concern about “the rapid increase in the use of fossil fuels for bitcoin mining.” As a result of these words, the price of bitcoin fell about 5% in the first minutes after Musk’s announcement.
Undoubtedly, this news has caught everyone with a changed foot. Above all because Elon Musk has made a lot of money from Bitcoin. And not years ago, if not just a few months ago. In February, Tesla revealed that it had invested $ 1.5 billion in Bitcoin and could invest more in other cryptocurrencies in the future.
What Elon Musk Doesn’t Want To Tell About Tesla Payments With Bitcoin REUTERS / Joe Skipper
At that time, the company said it would start accepting bitcoin as a payment method for its products. Support for cryptocurrency by Tesla contributed to the prices of cryptocurrencies, including Bitcoin and Dogecoin, will skyrocket in recent months.
At the end of April, Tesla announced its financial results for the first quarter of 2021 in its quarterly earnings call. The company made a surprisingly large profit this quarter, but it did not do so by selling cars. First-quarter net profit hit a new record for Tesla, at $ 438 million. Of that amount, 101 million came out of the sale of Bitcoin, that is, almost 25% of its profits in the first quarter of 2021 they came out of the cryptocurrencies that Elon Musk now despises. Absolute hypocrisy?
Why has the second richest man in the world changed his mind? The main excuse is environment. In the company’s statement, the following can be read: “Tesla has suspended the purchase of vehicles with Bitcoin. We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels. 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. Tesla won’t sell any Bitcoin and tWe intend to use it for transactions as soon as mining transforms into more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin's energy / transaction. "
Musk has been a fan of Bitcoin and Dogecoin, tweeting and joking about them with his millions of Twitter followers over the past year.
Even last weekend Tesla boss debuted as host on “Saturday Night Live” and he dedicated part of his opening monologue and a sketch to talking about Dogecoin. Rather than helping drive up the price of the meme-inspired token, dogecoin actually plunged 30% over the course of the hour Musk hosted SNL.
During a frenzied sale at the time, the popular trading platform Robinhood experienced a disruption in its cryptocurrency trading.
Conventional investors and some corporate buyers, such as Tesla, Square, Metromile and Nexon, They have flocked to bitcoin, seeing the digital currency as a potential hedge against inflation as central banks print money to ease economies struggling from the coronavirus.
The main banks of Wall Street, like Goldman Sachs and Morgan StanleyThey have also tried to offer their wealthy clients an exposure to bitcoin. But some investors, like Softbank founder Masayoshi Son, still don’t buy into the cryptocurrency craze.
“There is a lot of discussion about whether it is a good or bad thing, what is the true value or if it is a bubble. Sincerely I dont know”Son said at a recent results conference. Although Tesla said it would not accept Bitcoin for the purchase of vehicles on Wednesday, Musk specified that Tesla plans to hold rather than sell the Bitcoin it already has, and that it would be studying other cryptocurrencies that require less energy for transactions.
Following Musk’s announcement on Thursday, the owner of the Dallas Mavericks, Mark Cuban said that the team will continue to accept Bitcoin and other cryptocurrencies because “we know that substituting gold as a store of value will help the environment.”