Elon Musk said that Tesla would no longer accept bitcoin for car purchases. This decision is a result of environmental concerns, says Musk.
After Tesla stops car purchases with bitcoin, more than $366 billion wiped off the cryptocurrency market.
According to China, after Elon Musk tweeted that Tesla would suspend car purchases with bitcoin. Hence several billions of dollars were wiped off the cryptocurrency market.
According to data from Coinmarketcap.com, when Musk announced on Thursday, the value of the whole cryptocurrency market was around $2.44 trillion.
Later on this day, the market capitalization dropped to about $2.07 trillion, wiping off more than $365.86 billion.
In February, Tesla announced $1.5 billion worth of bitcoin that they purchased and planned to accept it for payments.
On Wednesday, Tesla CEO Elon Musk announced on Twitter that Tesla suspended vehicle purchases with bitcoin over the increasing use of fossil fuels for mining bitcoins.
After this announcement, the price of bitcoin dropped around 6% in the first minutes.
Musk said that they are concerned about increasing fossil fuels for transactions and Bitcoin mining, primarily coal with the worst emissions of any energy. He also mentioned that he likes the idea of cryptocurrency, and he believes it has a future. However, he added that it could not be costly to the environment. He said that Tesla would not sell any Bitcoin. Instead, they intend to use it for transactions once the mining transitions use sustainable energy. He also added that they look at other cryptocurrencies that use less energy than Bitcoin for the transaction.
Some corporate buyers like Tesla, Metromile, Square, and Nexon, with other mainstream investors, flocked to bitcoin. They all see the digital currency as a potential hedge of inflation during coronavirus when central banks try to relieve economies by printing more money.
Banks’ reaction to the global economy
As central Wall Street banks, Morgan Stanley and Goldman Sachs began to seek to provide their wealthy clients with bitcoin exposure.
However, some investors, such as Softbank founder Masayoshi Son, still doubting buying the crypto.
Masayoshi Son said there is much uncertainty over the bitcoin, whether it’s a good thing or a bad thing. If it has a valid value or it is just in a bubble.
On Thursday, Following Musk’s announcement, Mark Cuban, the owner of Dallas Mavericks, said that his team would still accept bitcoin and other cryptocurrencies.