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Elon Musk makes screeching bitcoin U-turn: Tesla boss says you can't buy cars with cryptocurrency sending the price plummeting

This Is Money logo This Is Money 13/05/2021 Matt Oliver For The Daily Mail
Elon Musk holding his hand up: MailOnline logo © Provided by This Is Money MailOnline logo

The price of bitcoin plummeted after top backer Elon Musk renounced the digital currency.

In a U-turn, the Tesla boss said his electric car maker would no longer accept bitcoin as payment due to concerns about its 'insane' environmental impact.

Until now, Musk was one of the biggest supporters of cryptocurrencies, tweeting about them regularly and causing spikes in their value.

Elon Musk holding a sign posing for the camera: ( © Provided by This Is Money (

Just three months ago, Tesla also spent more than £1billion on buying up bitcoin. But Musk's shock decision sent the crypto-currency plunging by more than 10 per cent, wiping tens of billions of pounds off its value.

Having peaked above $60,000 last month, it fell to around $46,000, its lowest level since March 1.

The 49-year-old said Tesla would refrain from selling bitcoin or accepting it as payment until 'mining' – the process by which new bitcoins are generated – could be done in a more eco-friendly fashion.

He said: 'We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. 


Video: Elon Musk says customers can buy a Tesla with bitcoin (CNBC)

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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.'

The billionaire followed the statement with a tweet describing energy usage related to bitcoin recently as 'insane', hitting the price further.

chart, histogram: ( © Provided by This Is Money (

However, he suggested Tesla was still open to using other digital currencies if they were found to be greener. 

AJ Bell analyst Laith Khalaf said backers would now be wondering 'where this leaves the future' of bitcoin.

'Tesla and bitcoin were always odd bedfellows, given the environmental credentials of the electric car maker, and the colossal amount of energy consumed by the cryptocurrency,' he added. 

Jeffrey Wang, head of Americas at Amber Group, a cryptocurrency service provider, said broader selling of risky assets was another factor behind Wednesday's bitcoin plunge and Tesla's decision 'was kind of the straw that broke the camel's back'.

Bitcoin and other cryptocurrencies are based on digital ledger technology known as the 'blockchain', a shared database of all transactions. Transactions are computed by a network of users – known as 'miners' – who are rewarded with more bitcoins.

But as more bitcoins enter circulation, the reward for processing them reduces – and miners need more computing power to extract them. 

These computers consume enormous amounts of electricity and the vast majority of mining is currently done in China, where coal accounts for 60 per cent of electricity generation.

David Gerard, an author and prominent bitcoin critic, has claimed bitcoin 'runs on coal' and has a 'ghastly and egregious' environmental impact.

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