Tesla: Bitcoin price drops after Elon Musk announces suspension of crypto payments

Elon Musk suspended the world’s most popular cryptocurrency over fears about its fossil fuel usage. Shortly after the announcement, Bitcoin’s price dropped sharply by around $2,000. 

Twitter users suggested Mr Musk’s comments caused the value of Bitcoin to drop.

According to crypto site Coindesk, the value of Bitcoin fell from $54,602.77 (£38,838.30) at 11pm to $52,466.99 (£37,319.15) just 15 minutes later.

It is unconfirmed whether Tesla’s statement caused the volatile digital currency to fall in value.

In a Twitter post, Mr Musk said: “Tesla has suspended vehicle purchasing 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 <1% of Bitcoin’s energy/transaction.”

Tesla purchased around $1.5 billion worth of Bitcoin back in February this year.

In a test of the market’s liquidity, Mr Musk and Zach Kirkhorn, Tesla’s Chief Financial Officer, offloaded 10% of their Bitcoin holdings and made a profit of more than $100 million.

On March 24, Mr Musk announced on Twitter that Tesla vehicles would be purchasable via Bitcoin, but has now reversed this decision within two months.

READ MORE: Dogecoin warning: Investors to ‘cash in’ on profits

On May 11, Mr Musk tweeted a poll to ask his 54 million followers whether Tesla should accept Dogecoin as a payment method, to which his fans responded overwhelmingly - Yes - with 78.2 percent of almost four million pollsters wanting the change.

Dogecoin’s price dropped sharply just before Mr Musk’s appearance on Saturday Night Live but, upon Tweeting the poll, Dogecoin’s price rebounded in a nearly 10 percent surge.

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