Tesla made a big investment in Bitcoin earlier this year after its CEO Elon Musk ironically pumped Dogecoin to a notable high with a series of tweets before later fueling it during his appearance on Saturday Night Live. And we mean big: $ 1.5 billion. The crypto investment wasn’t a token gesture either, as the automaker said it would also accept Bitcoin as a form of payment. Bitcoin values soared on the news.
But like most things that are going up, Tesla’s Bitcoin strategy has collapsed. Elon Musk announced that Tesla would no longer accept bitcoin for its vehicle sales, although the company appears to be sticking to the bitcoin it had left over after several currency sales that topped the automaker’s balance sheet in the first quarter of this year. Bitcoin values hit double-digit percentages on the news.
Well that seemed quick … but what is bitcoin?
Bitcoin is the most famous of a number of virtual currencies, and like Tesla itself, it has had a roller coaster ride since its debut. It peaked at around $ 19,000 in 2017 and fell to the middle of $ 3,000 the following year. As of late last year, the currency (along with the entire stock market) has gained serious traction. As recently as October, the values were in the range of USD 11,000. It hit an all-time high in early 2021.
As the best-known EV manufacturer, Tesla always has a certain green credibility in addition to its high-tech image. The Bitcoin pull is polishing the latter, but has ramifications for the former which are troubling. Bitcoin mining is very energy-intensive, and since energy is drawn from the grid, that usage generally results in a carbon footprint – especially when mining in China, which supplies much of its network with coal. According to some estimates the total carbon footprint of global bitcoin mining rivals, the from small nations or big cities. Elon Musk and Tesla’s promotion and acceptance of the currency – which has already had a significant impact on its value – could certainly lead to more mining activity and greater carbon impacts. Because of this, the automaker – Mr. Musk in particular – announced that Tesla would no longer accept Bitcoin in exchange for its vehicles.
What the automaker plans to do with the Bitcoin it currently holds is an open question, though, as noted, Tesla has used currency sell-offs to improve the bottom line. So don’t count on these coins going anywhere. In another tweet, Elon Musk says “To be clear, I firmly believe in crypto, but it cannot lead to a massive increase in the use of fossil fuels, especially coal. “”
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How do you have to pay for a Tesla? Looks like the US dollar is your friend again, although Musk already seems to be setting the internet on fire by toying with the idea of letting Teslas buy it with Dogecoin …