Cryptocurrency markets experienced a slight shake this week after Tesla founder and CEO Elon Musk abruptly announced that the company would no longer accept Bitcoin payments, citing environmental concerns.
“Cryptocurrency is a good idea on many levels and we believe it has a bright future, but it cannot result in high environmental costs,” wrote Musk. “[…] We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. “
I look forward to meeting you at iFX EXPO Dubai in May 2021 – make it happen!
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
– Elon Musk (@elonmusk) May 12, 2021
At the end of the announcement, Musk also mentioned that Tesla is “exploring other cryptocurrencies that consume <1% of Bitcoin's energy / transaction". Another tweet followed a few hours later: "To be clear, I am a firm believer in crypto, but it cannot lead to a massive increase in the use of fossil fuels, especially coal."
To be clear, I strongly believe in crypto, but it cannot lead to a massive spike in fossil fuel consumption, especially coal
– Elon Musk (@elonmusk) May 13, 2021
The announcement sparked shock waves in sales in the crypto markets. As the clear topic of the message, Bitcoin appears to be the hardest hit.
Less than 24 hours after the tweet was posted, Bitcoin price dropped about 17 percent, falling from about $ 58,000 to $ 49,000. While the price of BTC appears to have stabilized, the asset has failed to fully offset its losses. At the time of going to press, BTC was just below the $ 50,000 mark.
Tesla’s rejection of BTC could boost public perception of BTC as a high-energy animal
While Musk made it clear that Tesla would not sell any of the 38,300 BTC it holds on its balance sheet, the announcement appeared to represent a marked tonal shift in Tesla’s stance on the cryptocurrency.
While BTC is increasingly being understood as a store of value or a “hedge against inflation”, Bitcoin cannot shake its reputation as an energy-hungry, carbon-intensive network.
Just last month the New York Times published a piece that said, “[Bitcoin] makes up so little of the world’s total transactions, but has the carbon footprint of entire countries. In addition, Ars Technica reported last month that a private equity firm was reviving a decommissioned coal-fired power plant to mine BTC. The Washington Post recently reported that the Iranian government blamed bitcoin miners for a major power outage.
While certain factors, including the use of renewable energy in Bitcoin mining, have brought the facts about Bitcoin’s carbon footprint up for debate, Bitcoin is still viewed as problematic by the general public. So it seems pretty logical that Tesla, known for making low-emission, “sexy” electric cars, would step back from BTC to maintain an image of sustainability.
Still, the Bitcoin community has pushed Tesla’s claim that fossil fuel consumption has “increased rapidly” on the Bitcoin network.
The energy consumption trend over the past few months is insane https://t.co/E6o9s87trw pic.twitter.com/bmv9wotwKe
– Elon Musk (@elonmusk) May 13, 2021
“Elon … you can see that 75% of miners use renewable energy, right? This energy story has been exposed time and time again, ”said Anthony Pompliano, founder of Pomp Investments, in response to the announcement. In fact, last month, Ark Investments claimed 76 percent of Bitcoin miners use renewable energy. To date, no comprehensive scientific study has been conducted to accurately measure the carbon footprint of the Bitcoin network.
But just as Tesla campaigned for Bitcoin adoption earlier this year and perhaps inspired other companies to get involved, could its move from BTC cause other companies to distance themselves from Bitcoin?
There doesn’t seem to be much evidence of this, at least not yet. However, if Tesla introduces “other cryptocurrencies” that are lower in carbon consumption than BTC, crypto-curious companies and institutions can follow in their footsteps.
Does Tesla accept Dogecoin (DOGE)?
Indeed, Elon Musk’s statement that Tesla “is researching other cryptocurrencies that consume <1% of Bitcoin's energy / transaction" has led many in the crypto community to speculate about what coins might be on the lineup .
The crypto industry is a mess right now.
– Elon can’t make up his mind
– Saylor devours Bitcoin
– Coinbase Listing Doge
– Every shit pumps
– Mainstream media confused
– Central banks print continuously
– Institutions that pour cash
– Pomp @ (@APompliano) May 13, 2021
Given Elon Musk’s obvious fixation on Dogecoin (DOGE), the coin seems like the most obvious choice. Musk even released a Twitter poll on Wednesday asking the public whether or not Tesla should accept DOGE as a form of payment. Almost 80 percent of those surveyed said “yes”.
Would you like Tesla Doge to accept?
– Elon Musk (@elonmusk) May 11, 2021
On Friday, Musk tweeted that he “is working with Doge developers to improve the efficiency of system transactions. Potentially promising. “The price for DOGE seemed to jump in the wake of the tweet. In the 24 hours before going to press, DOGE rose by around 35 percent.
However, some members of the crypto community seem suspicious of Musk’s intentions with DogeCoin. “Name these developers. The world is very curious, ”replied the author Preston Pysh. “… or is this another Developers Secured tweet?”
Rob Frasca speaks with Ndau as the Adaptive Store of ValueGo about the article >>
Crypto market analyst Michael van de Poppe wrote: “Can you just stop tweeting?”
The price of Cardano (ADA) climbs to a new all-time high after the Cardano Foundation asked Elon to “get your employees to talk to our employees”.
So far, analysts are tracking the money. When the price of Bitcoin plummeted, prices for many other top 10 cryptocurrencies fell on the order of five to ten percent. However, ADA, the native token of the Cardano network, has hit a new all-time high, leading some to speculate that ADA could be a strong competitor for Tesla payments.
After Musk posted his announcement, the Cardano Foundation tagged him in a tweet asking him to “get your people to talk to our people.”
Cardano x Tesla: An Obvious Match? 🤔
A thread 🧵… # Cardano #CardanoCommunity #Blockchain pic.twitter.com/zJAlDV3muw
– Cardano Foundation (@CardanoStiftung), May 13, 2021
Since then, ADA supporters have jumped like crazy on the # Tesla4ADA movement.
Get this hashtag trend -> # Tesla4Ada
– Rick McCracken DIGI (@RichardMcCrackn) May 13, 2021
However, other ADA fans would prefer the cryptocurrency network to keep their distance from Elon Musk. A Twitter user with the handle @ CryptoNelson17 wrote, “While I would love it [Tesla to accept ADA] From a utility standpoint, I think @elonmusk is a bit unstable and could harm $ ADA in some way, ”he wrote.
“I mean, take the ‘Don’t buy Teslas with $ BTC anymore’ thing – you tell me Elon didn’t know it wasn’t green? He’s a kid in a candy store and plays (sic).”
I would love that from a utility standpoint, but I think @elonmusk is a bit unstable and it could harm $ ADA in some way.
I mean, take that “no more with $ BTC puchacing Tesla” thing – you’re telling me Elon didn’t know it wasn’t green? He’s a kid in a candy store and plays
– Tyler Nelson (@ CryptoNelson17) May 13, 2021
Could XRP be Tesla’s future payment coin?
The XRP community has also battled for Elon’s attention. While Ripple Labs has apparently been silent on the matter, XRP owners were quick to point out that the Ripple network claims to have one of the lowest carbon footprints of any blockchain on the market.
After #Ripple makes history, Elon can write his tweet saying that Tesla accepts #XRP pic.twitter.com/8WT7GiNiLf
– Razvan Stanciu (@ RazvanStanciu9) May 13, 2021
Crypto analyst Mr. Whale (@CryptoWhale) tweeted, “According to Elon Musk, Tesla is looking for cryptocurrencies that use less than 1% of Bitcoin’s energy consumption. Good thing $ XRP uses less than 0.001% of Bitcoin’s energy and only costs $ 0.0000136 per transaction. “
According to Elon Musk, Tesla is looking for cryptocurrencies that use less than 1% of Bitcoin’s energy consumption.
Good thing $ XRP uses less than 0.001% of Bitcoin’s energy and only costs $ 0.0000136 per transaction. pic.twitter.com/STtEH3X0y7
– Mr. Whale (@CryptoWhale) May 13, 2021
David Gokhshtein, the founder of Gokhshtein Media, also tweeted that he “might see Elon take over $ XRP in payment for Tesla products.”
I could also see Elon accepting $ XRP as payment for Tesla products.
– David Gokhshtein (@davidgokhshtein) May 13, 2021
However, just like in the DOGE and ADA communities, some XRP users weren’t too happy with the idea of Elon Musk publicly embracing XRP.
Twitter user @Beat_Diem wrote: “I don’t really want Elon in XRP, I don’t want a rigged market.” “
“We need adoption. It’s so easy to pay for a Tesla with Bitcoin using BitPay or any other crypto debit card even if Elon doesn’t want to. This is really stupid. (sic) ”
What do you think of Tesla’s decision to stop accepting BTC payments? Which cryptocurrencies could Tesla accept instead? Let us know in the comments below.