(Getty)
  • Tesla has suspended vehicle purchases made using Bitcoin, according to a tweet from CEO Elon Musk.
  • "Cryptocurrency is a good idea ... but this cannot come at great cost to the environment," Musk stated.
  • Bitcoin's value against the US dollar plummeted immediately.
  • Tesla reported buying $1.5 billion worth of bitcoin in February.
  • See more stories on Business Insider SA's home page.

Tesla has suspended vehicle purchases made using Bitcoin, according to a tweet from CEO Elon Musk.

And that immediately saw the crypto token's value plummet.

"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," Musk said in a tweet sent Wednesday.

Tesla reported buying $1.5 billion worth of Bitcoin in February.

The electric car maker will not sell Bitcoin, but intends to use the digital currency for transactions as soon as "mining transitions to more sustainable energy."

Within two hours of the announcement, the price of bitcoin relative to the US dollar had plunged by more than 15%.

Musk has personally supported investment in cryptocurrencies like bitcoin and dogecoin. Cambridge's Centre for Alternative Finance reported bitcoin's energy consumption — which is more than American Airlines, according to one measure — jumped 80% since the beginning of 2020.

"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," Musk said.

Bitcoin's energy consumption has recently come under scrutiny. Ars Technica reported a private-equity firm revived a defunct coal-fired power plant largely to mine bitcoin. And The Washington Post said the Iranian government blamed a power outage on bitcoin.

Cryptocurrency advocates defend bitcoin by saying miners increasingly rely on renewable energy sources, but estimates vary widely about how much that's the case, with studies saying anywhere from 39 to 74% of the bitcoin network's energy usage is green.

Here is the full text of the Tesla statement:

“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”, the electric car company CEO tweeted.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a 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.”

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