Bitcoin Market Cap Falls in Response as Tesla Group Halts Bitcoin Trading

Musk, the founder of Tesla Group, who not long ago praised the virtual currency Bitcoin, changed his claim on the 12th, announcing that Tesla EV Group would no longer accept Bitcoin transactions because the virtual currency’s mining practices consume huge amounts of electricity and pollute the environment. After Musk announced the decision on his Twitter account, the market value of bitcoin fell 10% in response.

Tesla Group actually announced that it would accept customers using bitcoin as a means of payment for its products only 1.5 months ago. At the time, Bitcoin’s market cap was soaring. Musk himself took to his Twitter platform earlier this year to extol the benefits of the digital currency, not only investing $1.5 billion in bitcoin, but also announcing in late March that Tesla Group would accept bitcoin transactions. This in fact played a role in fueling the rising value of bitcoin.

But 1.5 months later, Musk seems to have suddenly discovered that the act of bitcoin mining, which has been around for more than 10 years, comes with huge energy consumption and environmental pollution. 12, Musk said on the Twitter platform that the Tesla Group is disturbed by the fact that the act of mining is increasingly using fuels with high carbon emissions, especially coal, which is the most polluting.

Eighty percent of the mining to obtain bitcoins takes place within China. The scientific journal Nature published an investigative report last week stating that these mining practices could make it difficult for China to meet its promised climate goals because mining practices to obtain bitcoins require the use of a large number of computers to run specific algorithms, and the entire process uses a huge amount of electricity. The report concludes that if nothing is done, these Chinese bitcoin miners will emit more than 130 million metric tons of carbon dioxide by 2024, close to the greenhouse gas emissions of Italy or Saudi Arabia in one year.

Some investors in the Tesla Group, as well as some environmentalists, have been quite vocal about this. On the 12th, Musk explained his latest position on the Twitter platform, saying that digital currency is a good idea from many angles and has a great future, but it should not damage the environment. He also said that Tesla will not sell off its bitcoin holdings and will continue bitcoin trading after the mining machine uses sustainable energy.

Bitcoin’s market value fell 10% in response to Tesla Group’s announcement to stop bitcoin trading.