The Chief Executive Officer (CEO) of Tesla; Elon Musk made it known yesterday the 12th of May 2021 via the social networking platform; Twitter that the American electric vehicle and clean energy company; Tesla has “suspended vehicle purchases using bitcoin.”
The decision is reportedly as a result of concerns over “rapidly increasing use of fossil fuels for bitcoin mining.”
Following the news, the price of Bitcoin experienced a significant drop and got as low as 47,000 United States Dollars per BTC. As at the time of putting this article together, its price stood at 50,979.31 United States Dollars.
In a Securities and Exchange Commission (SEC) filing which was made in February 2020 Tesla which has its headquarters in Palo Alto, California stated that it bought 1.5 Billion United States Dollars worth of the Cryptocurrency; Bitcoin. It added that it may invest in more of Bitcoin as well as other cryptocurrencies in the foreseeable future.
The company also made it known at the time that it would begin accepting Bitcoin as a payment method for the products it offered.
The electric vehicle and clean energy company; Tesla’s support for Bitcoin is believed to have contributed to the increase in prices of Bitcoin and other cryptocurrencies like Dogecoin which skyrocketed in the months that followed.
The complete announcement by Elon Musk reads, “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. 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.”
Major investors along with a number of corporate buyers which include Square, Tesla, Nexon and Metromile have all made moves into Bitcoin. According to reports, they are looking at the digital currency or Cryptocurrency as a potential hedge against inflation as a number of central banks continue to print money in order to properly combat the economies which have been negatively affected by the Coronavirus.
Mainstream Wall Street banks like Morgan Stanley & Goldman Sachs have also in recent times began to provide a number of their clients with Bitcoin exposure.
Investors like the founder of Softbank; Masayoshi Son have however made it known that they will not be getting into the current crypto craze.
The Founder of SoftBank stated during an earnings conference that, “There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble. Honestly speaking, I don’t know.”
Although Tesla decide to no longer accept Bitcoin as payment for purchases of its vehicles, its Chief Executive Officer (CEO); Elon Musk clarified that the company will be holding the Bitcoin it currently has, instead of selling. He added that Tesla will be looking into other cryptocurrencies which require less energy for transactions.
In the first quarter of 2021, Tesla purchased 1.5 Billion United States Dollars worth of what it described as “digital assets”. It then proceeded to sell 272 Million United States Dollars worth of said digital assets.
A financial filing carried out by the company on the 26th of April 2021 revealed that the profits it made from the Bitcoin sale allowed it to achieve a 101 Million United States Dollar “positive impact” towards profitability.
Tesla’s Chief Executive Officer (CEO); Elon Musk has in recent times been a very public supporter of the cryptocurrencies; Bitcoin and Dogecoin. In the past 12 months alone, he has made jokes and tweets that alluded to both cryptocurrencies, to and with his millions of followers on the social networking app; Twitter.
Last weekend Elon Musk made his hosting debut on popular show the Saturday Night Live. While there, he dedicated part of his opening monologue as well as one sketch to discussing the meme inspired Dogecoin.
One interesting development is the fact that over the period of the hour where he was hosting Saturday Night Live Dogecoin’s value dropped by 30 percent instead increasing in value as was the expectation and projection.
During the value drop of Dogecoin, Robinhood which is a widely popular trading platform went through an outage in its cryptocurrency trading.
On Thursday the 14th of May 2021 and after the announcement by Tesla and Elon Musk, the owner of Dallas Mavericks; Mark Cuban announced that the Dallas Mavericks will continue to accept Bitcoin and other cryptocurrencies as payments because “we know that replacing Gold as a store of value will help the environment.”
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