A few weeks ago, Tesla announced to accept Bitcoin as an accepted and recognized payment gateway for car purchases. This announcement came as a major development for the crypto world, as it was started to get more relevant to the mainstream finances. Bitcoin’s value soared right after this announcement, and many people started to acknowledge the bright scope of cryptocurrencies.
However, on the contrary, Tesla has announced to stop accepting Bitcoin, citing environmental reasons. On Wednesday, the CEO of Tesla and renowned billionaire, Elon Musk tweeted that Tesla has ‘suspended vehicle purchases using bitcoin’. Moreover, he cited the reason for the ‘rapidly increasing use of fossil fuels for bitcoin mining.’
The impact of the announcement on the crypto market
Elon Musk has always had a unique connection with the crypto market. His statements, tweets, and responses have laid a mark on the performance of certain digital assets. This was evident throughout his advent of Dogecoin. It was a meme coin at first, but through constant support from Elon, it is now the fourth-largest cryptocurrency in the world. Elon’s SNL appearance was also highly anticipated over Dogecoin. However, when he used the word ‘hustle’ for Doge, the prices crashed within minutes.
Similarly, soon after his recent tweet, the value of Bitcoin has gone considerably down. Within few minutes the price of Bitcoin fell by about 5%, and now it has dropped below $51,000. Bitcoin was already going through a rough patch, facing resistance and correction in the market. Thus, these developments will be a real dent in the largest cryptocurrency in the world.
Tesla stated in February that it did buy $1.5 billion worth of Bitcoin, and continues to plan for investing more in different cryptocurrencies. It did send the prices on the roof, and at that time, many investors were rumored to have stocked Bitcoin. These investors included Square, Metromile, and Nexon.
Musk has been a vocal fan of Bitcoin and Dogecoin. However, he said in his tweet that Tesla plans to look out for other cryptocurrencies that require less energy. Many experts and analysts speculate that this is an indication of Tesla accepting Dogecoin as a payment method. In such a case scenario, this might be a major break for the unconventional crypto token.
Elon has also faced criticism over his announcement. As many experts claim that by being a replacement to Gold as a store of value, Bitcoin is already playing its part in preserving the environment.