Dogecoin crisis: Crypto 'won't last' as Elon Musk deals brutal blow

The world of crypto was stunned yesterday after Tesla CEO Elon Musk announced the company would stop accepting Bitcoin for car purchases — even though the company continues to hold the digital coin on its books. Mr Musk said: "Tesla has suspended vehicle purchases using Bitcoin. 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, 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. We are also looking at other cryptocurrencies that use [less than] one percent of Bitcoin’s energy/transaction.”

His statement comes amid concerns over the impact on the environment the mining of cryptocurrencies has.

Last weekend, Mr Musk appeared on 'Saturday Night Live' and devoted part of his opening monologue and one sketch to talking up Dogecoin.

But Dogecoin's value tanked 30 percent over the course of the hour that Mr Musk was hosting the show.

In April, Dogecoin enjoyed a sure of more than 900 percent – but one expert warned its rally would not last.

Adam Zadikoff, COO of BRD, a popular crypto wallet that boasts more than seven million users, told CNBC: “My guess is that [the rally] won’t last, especially for something like Dogecoin which was never meant to be a payment system or a store of value.

“Yes, you can make a quick buck if you time it right, but timing the market is a terrible thing to try to do. It does not work.

“You see the power in social media to move people to do something en masse. This is the flash-in-a-pan thing that people are getting behind right now.”

Mr Zadikoff said he would not consider investing in Dogecoin.

He added: “It’s great if you have some disposable income and you’re playing around and you’re having fun with it.

“The danger is you’re the last person holding the bag.”

Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a joke, making fun of the wild speculation in cryptocurrencies at the time.

Bitcoin has also divided opinion.

David Sacco, an expert in cryptocurrencies from the University of New Haven, told earlier this year that Bitcoin will one day reach the $1million (£722,000) mark.

READ MORE: Bitcoin resurgence: Crytocurrency to reach $250,000 value 'by July'

Britain’s Financial Conduct Authority (FCA) warned investors of the risks that come with Bitcoin following the recent slump.

They said: “If consumers invest, they should be prepared to lose all their money.

"Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.

“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.” does not give financial advice. The journalists who worked on this article do not own Bitcoin.

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