There have been many controversies over the price of cryptocurrencies, especially when Tesla’s CEO, Elon Musk, bought US$1.5 billion (almost A$2 billion) of Bitcoin.
As of 6:50 am ET, Thursday, May 13th, the value of Bitcoin dropped by 12 per cent, bringing its price down to about $49,300, according to cryptocurrency news website Coindesk.
This incident happened after Musk’s Tesla suspended vehicle purchases using Bitcoin. The CEO he was concerned about what fossil fuels, which is used in mining cryptocurrency, might do to the environment. According to him, “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 & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Further data from Coindesk confirmed that not only Bitcoin plunged after Musk’s announcement, with Ethereum losing 14% and Dogecoin shedding nearly 20%.
Elon Musk Is On A Roller Coaster
CNN has said that Tesla did not immediately respond to questions regarding the move, including how many vehicles have been purchased with bitcoin and whether Musk was previously unaware of its environmental impact.
According to the news report, “The environmental cost of mining — or creating — digital currencies has been well-documented for years, with the debate around them reignited in recent months as cryptocurrency-based tokens known as NFTs exploded in popularity.”
Tesla (TSLA) and Musk have appeared fairly bullish on Bitcoin for at least a few months. Early this year, the company disclosed it had bought $1.5 billion worth of the cryptocurrency; touting the ability to buy its cars using Bitcoin.
In the past, the CEO had been sceptical about the value of cryptocurrencies. CNN reported Elon Musk saying, in an interview on Clubhouse, earlier this year, that he thinks that Bitcoin is on the verge of being accepted widely by conventional finance people. The CEO stated that he should have purchased the digital currency eight years ago.
On Wednesday, Musk said Tesla still plans to use bitcoin after the currency finds cleaner energy sources. “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy,” he said. “We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
Bitcoin isn’t the only cryptocurrency Musk has touted in recent weeks. He has also repeatedly hyped the canine-themed dogecoin, tweeting about it to his 54 million followers and even sending its price crashing when he played a character on “Saturday Night Live” who called the currency a “hustle.”
Musk’s last tweet before his Wednesday bitcoin about-face was a poll asking followers if they wanted “Tesla to accept Doge.”
