The crypto markets suffered after Tesla CEO Elon Musk tweeted that they would not be accepting Bitcoin as payment for Tesla cars. Musk suspended the plans citing environmental concerns. Earlier this year, Mr Musk had announced that Tesla would be accepting Bitcoins as payments.
Musk’s U-turn had a drastic impact on the crypto market. All top tokens including Bitcoins and Ethereum dropped significantly. Bitcoin dropped below the $50,000 mark. The entire market which was about $2.43 trillion in size, lost $365.85 billion within hours after the tweet.
Explaining why he would not be accepting Bitcoins anymore, Musk said that Tesla is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
The energy consumed to mine bitcoins is significantly high and it is indeed not very much environmentally friendly. At press time, Bitcoin is trading around $50,000, down 12%. Ethereum has shrunk and in trading around $3,600.
The bull run in the market seems to have taken a hit. However, despite the drop Bitcoin is significantly up since January 2021. Ethereum continues to trade at its highest, though it is down from the iconic $4000 mark. Recent events have shown one thing that the market is highly responsive to tweets from influential people.
We are yet to witness the full-scale impact of Musk’s decision and tweet. For now the market seems to be trying to recover.