Tesla halts Bitcoin car sales and roils the market

Tesla announced it would suspend sales of electric cars for Bitcoin due to concerns about the environmental footprint of mining the cryptocurrency. The asset’s price reacted with a drop, and the community criticised.

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP

— Elon Musk (@elonmusk) May 12, 2021

“We are concerned about the rapid rise in the use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions among all fuels,” the statement said.

The maker of electric cars noted that cryptocurrency has a promising future, but that future should not come at the expense of the environment.

The company pledged not to sell the bitcoins, which it owns, and resume sales of the digital gold when mining aligns with the concept of sustainable development.

Tesla is also considering other cryptocurrencies that spend less than one per cent of the energy used by the Bitcoin network to process transactions.

Following the release of the company’s statement, Bitcoin’s price tumbled to $45,700 — the lowest since February. By the time of writing, quotes had recovered to around $51,000.

The community reacted strongly to Tesla’s decision. Users noted that the company had only recently drawn attention to the energy consumption of the Bitcoin network two months after the start of accepting cryptocurrency payments.

Some saw a possible reason for the sudden criticism of digital-gold mining in Tesla’s plans to obtain loans for producing electricity from renewable sources. The Biden administration is funding under the Bush-era program RFS, which has been significantly expanded.

Reuters, citing its own sources, reported that the automaker is among at least eight firms awaiting consideration of their applications by the Environmental Protection Agency. Tesla’s proposal is likely related to the use of biogas at landfills.

In a tweet, Morgan Creek Digital co-founder Anthony Pompliano reminded that, according to studies, 75% of miners use renewable energy.

Economist Saifedean Ammous, author of “A Short History of Money, or Everything You Need to Know About Bitcoin”, told Musk:

“If you do not also shift rocket and battery production to ‘more sustainable energy’, you will look like an ignorant big hypocrite. Sound money is needed by the world far more than your rockets and subsidised government electric cars.”

As reported, ECB Executive Board member Fabio Panetta said that cryptocurrency mining, such as Bitcoin, poses a threat to global sustainable development in ecological terms.

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