Bitcoin price drops by over $8,000 after Tesla opts to stop taking BTC payments

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on May 13, 2021
  • Elon Musk announced earlier today that Tesla will no longer accept BTC payments for its electric vehicles.
  • There are concerns regarding the environment, as BTC mining is not environmentally-friendly.
  • The move caused the crypto market to crash, although the recovery has seemingly already started.

For months now, the CEO of Tesla and SpaceX, Elon Musk, kept getting praises from the crypto industry, as the world’s favorite billionaire continuously supported crypto. Elon Musk has been referencing cryptocurrencies through his tweets for years, but he really started getting involved in 2021.

Earlier this year, Tesla announced that it will accept crypto payments, and it invested $1.5 billion into BTC, and Musk himself admitted to personally holding some bitcoins at one point. On top of that, Musk is particularly known for his close ties to Dogecoin (DOGE), which he promoted on a daily basis for a certain period of time.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Given all of that, it came as quite a shock when Musk recently announced that Tesla will no longer accept BTC payments. According to him, this was decided for environmental reasons, as Bitcoin mining is anything but green. Mining and transactions are too carbon-intensive, which goes against what Tesla stands for. Musk’s change of attitude came only a few weeks after he argued that embracing BTC could be a boon for renewable energy.

Bitcoin reacted and the community is not happy

As it was to be expected, Bitcoin price reacted almost immediately, crashing down by around $8,000 in a matter of hours. In the last 24 hours, the price went from $57,470 to $48,900 following this news. Fortunately, it would appear that the recovery has already started, as BTC is once again at $50k at the time of writing.

The industry is, understandably, currently filled with confusion and anger, even though Musk’s announcement continues to claim that crypto is a good idea on many levels, and that it has a promising future. Furthermore, it should be noted that Tesla continues to hold on to its BTC investment, which was also pointed out by the announcement. Musk said that Tesla has no plans to sell, but to use it for transactions as soon as mining transitions to more sustainable energy.

Some see this as Musk trying to manipulate the market, which was, naturally, met with a lot of rage. However, the announcement itself seems to be a push towards finding a greener solution for mining BTC. Lastly, there are also theories that this is yet another ploy to push DOGE forward, as “Elon’s favorite coin” has a much smaller carbon footprint.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
10/10
67% of retail CFD accounts lose money