Elon Musk hits the brakes on taking Bitcoin for Tesla purchases

CEO wakes up to BTC's connection to coal, holds onto the stash until mining becomes more eco friendly


Tesla CEO Elon Musk has announced his electric car maker will stop accepting Bitcoin payments for its vehicles.

The occasional host of television sketch comedy program Saturday Night Live took to Twitter to deliver the news. Tl;dr: Tesla is concerned about the "increasing use" of fossil fuels, particularly coal, to support Bitcoin's electricity-hungry mining and transaction processing. The cost to the environment cannot be ignored, Tesla isn't selling its Bitcoin stash, it will consider using more energy-friendly crypto-coins instead, and will return to using Bitcoin when mining uses more sustainable energy.

Soon after that tweet, the price of Bitcoin dipped from $54,600 to $52,450 apiece albeit on a day in which the major cryptocurrencies are down and the market in general slid amid worries about inflation. As such, Bitcoin's value has dropped lower still in the time since Musk's announcement, and is down more than ten per cent for the day though up about 80 per cent for the year.

It's just awkward for Tesla as its most recent quarterly SEC filing, dated April 27, revealed the automaker bought $1.5bn of Bitcoin in the three months to the end of March this year.

Across that period “we recorded $27 million of impairment losses on Bitcoin,” the filing stated. “We also realized gains of $128 million through sales during the three months ended March 31, 2021,” and ended the quarter with its Bitcoin stash worth, at the time, $2.48bn.

Musk is far from the first to point out that Bitcoin mining and processing uses a lot of electricity, and therefore produces a lot of atmospheric carbon dioxide that humanity and Earth could almost certainly do without right now.

The CEO’s alternative crypto payment option may be Dogecoin, as he just polled Twitter for its support of the meme-tastic cryptocurrency. More than three-quarters of four million voters indicated they wanted Tesla to accept Doge.

Then there's his SpaceX DOGE-1 mission to the Moon, paid for by Dogecoin.

Whatever Musk is up to, Tesla buyers will probably be more focused on when or if their new rides will arrive, as the company has reportedly again experienced production problems that mean cars arrive around three months after being ordered. Other automakers are also experiencing shipping delays due to COVID-19-related complications, though Tesla has a long history of struggling to get vehicles out the door on time. ®

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