The second richest man in the world and prominent supporter of bitcoin, Elon Musk, has backtracked from using the most popular cryptocurrency as a payment option for Tesla cars.
In a statement shared on his Twitter account, it was stated that the decision was made to protect the environment which is being damaged by emissions from fossil fuels.
There have been debate about the role bitcoin plays in the increasing use of fossils fuels, especially coal, which produces the highest emissions. Fossil fuels is used to mine bitcoin to make it available for the cryptocurrency market.
In a bid to discourage the continued use, Musk and Tesla have decided to discontinue the acceptance of bitcoin as payment, “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this can not come at a great loss to the environment.
“Tesla will not be selling any bitcoin, and we intend to use it for transactions as soon as mining transitions into more sustainable energy.” Musk said.
The statement seen by Ripples Nigeria, stated that Tesla is weighing cryptocurrency options to replace bitcoin. But the company plans to use only the crypto that uses, “1% of bitcoin energy/transaction.” or only sustainable energy.
Old tweet resurfaces to hunt Elon Musk
Some of the critic of bitcoin and other cryptocurrencies have argued their points through the climate change angle since the ponzi scheme allegation has failed to have a negative impact on the crypto market.
They say since bitcoin and the digital assets became popular, there have been an increase use in fossil fuels, which is damaging the environment. This argument was experiencing a slow like that of the ponzi until Musk gave it life.
Since he released the statement, a tweet from him admitting bitcoin encourages sustainable energy has been trending. Musk had tweeted just a single word “True” on April 22, 2021.
That word was in response to Twitter founder’s argument in support of bitcoin being a key driver for renewable energy’s future. Jack Dorsey stated that bitcoin incentivises renewable energy, and Musk tweeted in agreement.
That word has now become the tool used by other bitcoin supporters to tackle Musk’s decision to drop bitcoin as a payment option. Bitcoin holders are asking why he made the comment in April and changed his stance a month after.
Some part of the bitcoin community believe the decision by Musk to drop bitcoin as payment option is a move to direct investors to Dogecoin, which is the new favourite of the billionaire.
Hours before the announcement was made, Musk had asked his followers on Twitter if Tesla should accept Dogecoin as payment. Out of 3.92 million votes, 78 percent voted Dogecoin should become a payment option for Tesla, and 22 percent were against the idea.
This survey was one of the events that led to the announcement of bitcoin being unsuitable as payment option for Tesla vehicles, as Musk had also used SpaceX launch to promote Dogecoin three days before.
Ripple effect of Musk and Tesla decision down Bitcoin, Dogecoin
Musk is an influential figure in the cryptocurrency market, and any decision he makes usually have an impact on how crypto investors react. This was reflected in the price movement of bitcoin and Dogecoin in the early hours of Thursday.
Bitcoin price fell from $52,984 per coin to $47,720, with holders losing over $5,000, as some investors moved to protect their loss or engage in profit taking. In the past 24hours, bitcoin price dropped by 11.64 percent.
Although bitcoin price has began to rally round, as it currently trade at $50,403. The market capitalisation of bitcoin has also fallen from the trillion mark, as it is currently valued at $942.97 billion, crashing from N1.08 trillion Ripples Nigeria reported four days ago.
Musk’s decision, however, failed to drive the expected surge to Dogecoin, which also dropped in price value to $0.375128 per coin, from $0.462256, as investors confidence declined on the back of bitcoin being dropped by Tesla.
In the past 24 hours, Dogecoin had dwindled in value by 17.58 percent, and its market capitalisation crashed to $53.16 billion, against the $69.48 billion it held four days ago.
By Fakoyejo Ayodeji
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