Bitcoin plummeted as much as 14 percent after Tesla CEO Elon Musk said the electric car maker suspended use of the cryptocurrency as payment for its vehicles.
Musk added in a tweet that Tesla would not sell any of its current bitcoin holdings, which had risen to nearly $2.5 billion as of the end of March.
The price of Bitcoin tumbled about 14 percent after the tweet, from a price of about $54,658 per token just before Musk’s tweet to a low of $46,980 at around 8 p.m. ET, according to coinmarketcap.com. As of 8:30 a.m., Bitcoin was down about 11 percent, according to the coinmarketcap.com data.
Musk cited environmental concerns in the announcement, saying that the company is concerned about the rising use of fossil fuels to mine Bitcoin and to conduct transactions. The environmental toll of Bitcoin mining and that of other cryptocurrencies has been well documented for years.
He added Thursday morning that, “Energy usage trend over past few months is insane.”
Musk, however, said that the company will consider accepting other cryptos.
“We are also looking at other cryptocurrencies that use <1% of bitcoin’s energy/transaction,” Musk said.
Tesla announced in February that it bought $1.5 billion worth of Bitcoin and said the company planned to accept it for transactions. In March, the company began to accept the crypto as payment.
Tesla’s embrace of Bitcoin at the time was seen as a huge step toward institutional acceptance of the cyber currency and it helped boost its price to record levels. Musk was met with sweeping criticism for his about-face on the crypto.
Barstool Sports founder Dave Portnoy, who’s made a name for himself recently playing the stock market and especially cryptocurrencies, called an “emergency press conference” on TikTok.
“Elon Musk just tried to tank Bitcoin,” Portnoy said. “Yeah, the same Elon Musk who had Bitcoin on Tesla’s spreadsheet and their balance sheet so Tesla can show a profit at the end of a quarter because they’re not selling cars, now suddenly Bitcoin’s bad.”
He added that Musk has been “pulling the levers like the Wizard of Oz on crypto.”
“This is bulls—,” Portnoy said, describing himself as a former “Elon fanboy.”
“This move Elon’s doing, up and down and changing markets, shady sh–, shady sh–,” he added.