Bitcoin, Dogecoin sink after Elon Musk walks back Tesla's support for crypto transactions
Javier E. David
·Editor focused on markets and the economy
Wed, May 12, 2021, 8:24 PM·3 min re
Elon Musk sent Bitcoin (
BTC) reeling on Wednesday, after he announced that Tesla (
TSLA) would stop accepting it for car purchases — even though the company
continues to hold the digital coin on its books.
In a Twitter post, Musk cited the environmental impact of Bitcoin mining, which has been cited by critics for being energy intensive and a detriment to the climate.
The move took cryptocurrency enthusiasts by surprise, and drove down the price of Bitcoin after hours, with the volatile digital currency shedding over 13%. Other major crypto units followed suit, as investors moved to discount how the loss of a prominent backer's support would impact the asset class's development.
Musk said in his post that Tesla was "concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."
"Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment," Musk wrote.