Bitcoin price: Crypto plummets 13% after Elon Musk Tesla tweet … Thu, 13 May 2021 08:00:00 +0100-Bitcoin fell by more than 10 per cent on Thursday night, after Elon Musk tweeted to announce that Tesla is suspending vehicle purchases using the …
Bitcoin fell by more than 10 per cent on Thursday night, after Elon Musk tweeted to announce that Tesla is suspending vehicle purchases using the cryptocurrency.
Its price was at around $55,000 (£39,000) before Musk’s tweet, when it quickly nosedived to $48,000 (£34,000).
It has since recovered slightly, and is currently sat around $50,000 (£36,000).
Musk is cryptocurrency’s most high profile supporter, and has shown an ability to influence markets merely by posting memes.
But yesterday’s tweet feels more significant, with Musk acknowledging the environmental concerns around Bitcoin.
What did Elon Musk say?
Announcing that Tesla will no longer support vehicle purchases in Bitcoin, Musk 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.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future,” he added. “But this cannot come at great cost to the environment.”
Musk said Tesla will not be selling any of the Bitcoin it has purchases, and that the company intends to use it for transactions “as soon as mining transitions to more sustainable energy”.
He said Tesla is also looking at other cryptocurrencies that use less than one per cent of Bitcoin’s energy.
Market analyst Julia Lee, from Burman Invest, told the BBC: “Environmental, Social and Corporate Governance (ESG) issues are now a major motivation for many investors. Tesla, being a clean energy-focussed company, might want to work better in the environmental area of ESG.
“But a cynic might suggest that this is just another move by Elon Musk to influence the cryptocurrency market, as he has done on so many other occasions.”
What are the environmental concerns around Bitcoin?
Mining Bitcoin is a very energy-intensive process, due to it requiring high-powered computers operating 24/7.
The electricity these computers use often come from non-renewable fossil fuels.
Around 70 per cent of the world’s Bitcoin mining is carried out in China, according to data from the University of Cambridge’s Centre for Alternative Finance.
Miners tend to use renewable hydropower energy during the summer rainy season, but fossil fuels for the rest of the year.
Bitcoin has a carbon footprint the size of one of China’s 10 largest cities, a fact that has long been one of the biggest concerns about its viability as a currency of the future.
Why the price of Bitcoin has dipped, after Elon Musk announces … Thu, 13 May 2021 08:00:00 +0100-BITCOIN price has continued to fall in recent hours by up to 13 percent, after Tesla CEO Elon Musk tweeted that the car manufacturer will no longer be accepting …
Bitcoin has seen a sudden drop in value over the past few hours, with a single Bitcoin down by more than $7,000 (£5,000). The drop was largely linked to Elon Musk's tweet confirming that Tesla won't be accepting the cryptocurrency as payment any longer.
Bitcoin is a type of cryptocurrency that was first invented in 2008.
It's a decentralised digital currency, which means it doesn't need a central bank to oversee transfers.
Bitcoins were created as a reward for digital mining – a type of record-keeping that uses large amounts of computer processing power.
But mining has a relatively large carbon footprint as it uses a lot of electricity.
Bitcoin price: Crypto value falls 13% after Elon Musk's Tesla tweet – should you buy Bitcoin? (Image: GETTY Images/Twitter (@elonmusk))
Musk tweeted that Tesla wouldn't be using Bitcoin as a type of payment anymore, owing to climate change fears.
“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,” he said.
“Cryptocurrency is a good idea… but this cannot come at great cost to the environment.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”
After Tesla's announcement, Bitcoin saw a sudden drop in value.
Shortly before Musk tweeted, Bitcoin was trading at around $54,602.
But just over two hours later, the price had fallen to $47,720.
It was the lowest price for Bitcoin since April 25, when it hit a new low of $47,273.
But, the crypto has still seen a 75 percent rise in value since January, and this time last year was worth less than $10,000.
Bitcoin price: Bitcoin is highly volatile and there's no guarantee of success (Image: GETTY Images)
– May 13, 2021
Bitcoin price Why the price of Bitcoin has dipped after Elon Musk announces