Tesla decides allowing people to buy cars with Bitcoin is a bad idea

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Words: Matthew Hansen
13 May 2021

After making the unprecedented decision to allow customers to purchase new cars with Bitcoin, Tesla CEO Elon Musk has confirmed it will suspend the action.

Tesla only announced it would accept Bitcoin as payment just two month ago in March, making US$101million in Bitcoin sales during the first quarter of 2021 according to its earnings report from late April.

According to Musk, the decision to ditch Bitcoin is environmentally motivated; the CEO stating that the amount of fuels used for Bitcoin mining and transactions doesn’t align with Tesla’s environmental motives.

“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,” Musk said. “Cryptocurrency is a good idea and we believe it has a positive future, but this cannot come at great cost to the environment.”

The news comes just days after the tech magnate appeared on Saturday Night Live as host. Most reactions to his performance were positive; Musk having announced during his opening monologue that he has Asperger's syndrome, something he had never talked about in the past.

Despite this, the biggest talking point of the show was Musk’s brief claim about cryptocurrency Dogecoin. In a brief, Musk labelled the cryptocurrency “a hustle”. This caused values of Dogecoin, a coin that exploded in value this year and made many people theoretical millionaires almost overnight, to plummet.

Julia Lee from Burman Invest told the BBC that the move might be an attempt from Musk to influence the cryptocurrency market.

“Environmental, Social and Corporate Governance (ESG) issues are now a major motivation for many investors. Tesla, being a clean energy-focused company, might want to work better in the environmental area of ESG,” she said.

“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.”

 

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