Elon Musk has announced that Telsa will no longer accept the popular cryptocurrency Bitcoin as a form of payment. Tesla was one of the first companies who started the trend of allowing customers to pay with cryptocurrencies. They began doing so in February of 2021 when they announced that they purchased $1.5 billion worth of Bitcoin. Now, this recent move leaves a lot of the crypto community scrambling.
The driving force: energy use
Musk’s main concern that led to wiping out Bitcoin sales was environmental impact. He believes that incentivizing people to spend this currency at his company will cause a drastic increase in fossil fuels, especially coal, which is used in the crypto mining process. Some analysts believe emissions from rapidly mining Bitcoin could be extremely harmful to the environment.
Throwing cold water on crypto
As expected, there is massive fallout in the crypto community. Over $365 billion has already been wiped off of the cryptocurrency market. After weeks of growth, the price of Bitcoin has dipped below its last major milestone of $50,000 for the first time since April 24. Some people see this as a major challenge; others see it as a small bump in the road.
Bitcoin is still seeing high numbers.
Despite the recent setback, Bitcoin is still up 400% over the last 12 months. Hitting $50,000 was a significant milestone for its investors. Cryptocurrencies are volatile, and those who have put their money into Bitcoin need to have the ability to weather storms like this. It is not the first hurdle Bitcoin has faced, and it won’t be the last. Meanwhile, several major companies — such as Microsoft, Burger King, the Miami Dolphins and KFC — still accept it as a form of payment.
Will the currency ever be universally accepted?
On the other hand, many believe that if Bitcoin is ever to be universally accepted as a form of currency, we need to purchase goods with it. At the moment, you can only assign its value through the U.S. dollar or whatever currency you use. For this currency to stand on its own, we need to be able to say, “This car is worth 5 Bitcoins” instead of “I have $20,000 worth of Bitcoin.” Tesla and Elon Musk have always been major players in the cryptocurrency community. If they are taking a step back, could that be cause for concern?
Where do you land on this issue?