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Musk Crashes Cryptocurrency Prices With Tesla Announcement

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Tesla CEO Elon Musk sent cryptocurrency prices plunging last Wednesday.  Prices of popular cryptocurrencies came crashing by as much as 17% after he announced that Tesla bitcoin prices after tweeting that the EV carmaker will stop accepting Bitcoin as payment.

RELATED: You Can Now Use Bitcoin to Buy Tesla Cars

Elon Musk’s Tweet 

The tweet, sent early evening explains Tesla’s decision to distance themselves from crypto. It read: “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worse emissions of any fuel.”

“Cryptocurrency is a good idea on many levels and we believe it has a promising future but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy /transaction.”

Cryptocurrency Prices Down By $365 Billion 

At around 6 pm Eastern Time, Musk sent his infamous tweet as the total cryptocurrency market totaled $2.43 trillion. By 8:45 pm EST, the cryptocurrency market lost around $365.85 billion, dropping to $2.06 trillion. Since then, the crypto market attempted a recovery. By 9 pm EST, the market recovered at least $200 billion. 

In particular, Bitcoin received the brunt of the pullback. After Musk’s tweet, bitcoin prices dropped by 17% and dropped below $50,000 for the first time since April 24. Despite the crash, the popular cryptocurrency price managed to return above $50,00.  As of 2:30 pm EST, Bitcoin is trading at $50,897.70. More importantly, Bitcoin remains 100 times higher than their trading price five years ago. 

Why Is Tesla Dropping Bitcoin As Payment?

Musk’s announcement came just three months after Tesla announced they will start accepting Bitcoin as payment for their electric vehicles. In addition, Tesla also announced that the company invested around $1,5 billion worth of bitcoin. 

Now, Musk and Tesla made a surprise U-turn. He said that the cryptocurrency is very energy-intensive. The mining process, where cryptocurrency comes from, involved many powerful computers. These computers try to solve math equations that require lots of computing power. Whichever computer helped solve the equation receives a share of the bitcoin generated. However, Musk did say he remains open to accepting cryptocurrencies with lower energy requirements. 

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Bitcoin Mining Uses A Lot of Fossil Fuel

Tesla vehicles are known all over for running on batteries instead of fossil fuel. It became ironic for Tesla to support a currency that uses a lot of fossil-fuel energy. Even as Tesla touted its aim of fighting climate change, its decision to carry bitcoin came as a surprise.  

However, many cryptocurrency followers say that crypto mining doesn’t choose where it draws its power. Many of its miners use computers powered by renewable energy. In fact, Bitcoin mining actually kept fossil fuel power plants in production when they would otherwise be inactive, adding to the world’s carbon footprint.  

Musk Also Crashed Dogecoin 

Musk also figured prominently in another instance of crashing cryptocurrency prices last week. During a hosting stint in ”Saturday Night Live,” Musk jokingly agreed that Dogecoin is a “hustle” when asked by a cast member. The meme-based cryptocurrency saw its value plunge immediately after Musk’s remarks.

Watch the Fox 5 San Diego report that Tesla will stop accepting Bitcoin as payment

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Do you support the wider use of cryptocurrencies such as Bitcoin? Do you think that they will make good substitutes for paper money and coins in the future? Let us know what you think about cryptocurrency and cryptocurrency prices by posting your comments below.

10 Comments

10 Comments

  • Econ Prof says:

    Crypto is the Dutch Tulip bulb bubble of the 21st Century. Has no intrinsic value, is totally dependent on cache & a balance of supply/demand. This Century’s version of musical chairs.

  • Mike McDonald says:

    I will place no dollars in crypto money.

  • Adisgusted Patron says:

    I do support use of Cryptocurrency but NOT to replace our paper or coin money!
    MUSK like several others (who use people, causing so many to hit rock bottom) they only care about how thick the lining of the own pockets are and have No heart or concern of those who pray to make just enough money to make their mortgage payments and put food on the table for their families.

  • Melissa says:

    Why not bring back the wooden nickel?!?! It has as much value as crypto currency NONE! Both are equally WORTHLESS!

  • thomas murphy says:

    Again .The only rhing wrong with the current money system is big government changing the rules in areas they haven’t done their home work again and want to change something that has worked for hundreds if not thousands of years .You have to have something of value that reflects the amount of a trading item that can be used and is limited in quantity.Like gold backed our dollar ! Gold is a limited item that can be used for many things .Thats what makes it worth what it is .Not some made up item that can be manipulated Didnt we learn this once from history when Dutch mark .Took a wheel barrel of money to buy a loaf of bread ? If the trading currency is not backed by something of great need .And Government’s keep printing their money .Soon it wont be worth the paper its printed on ! We have other social issues that need our energy .Go back to gold !

  • Dave Motz says:

    What a hypocrite! Does he not know how all the rare earth elements that his “ renewable” energy car requires to operate are mined and where?! They are just glorified golf carts anyway. Anyone own a golf cart? See ya in a couple years when your power plant( batteries) die. It’ll be interesting to see the used electric car market in about 5 years. I predict screaming deals on low mile Tesla’s that just need new batteries.

  • Gary L Elam says:

    Piss 0n Musk and his pice of shit Tesla.

  • thomas murphy says:

    Over 80 percent vof our electricity is generated by fossil fuel that heats up water to make steam .I dont see any mew power plants coming on line to make up the extra electic thats going to be needed for all this electricity demand .We cannot even keep our homes with steady electricity .Just this mth alone we have had three rolling black outs .What the hell are these people thinking ?

  • yvonne says:

    What is the security in the value of Bitcoins? Who and how backs up the “currency”?

  • ron says:

    perfect tool for total government control if all populations. make us use them, then delete your money at the touch if a button if we dont do what you say!!!!!! NO WAY. PLEASE wakebup people! , dont give up your freedoms if a free society and your control of your money, future and your grandkids future..

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