All major cryptocurrency platforms tumbled following a tweet from Elon Musk that Electric vehicle manufacturer Tesla would no longer be accepting bitcoin as payment.
“Tesla has suspended vehicle purchasing 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,” Musk tweeted at 6 p.m. EST.
Following this tweet, the price of bitcoin promptly crashed, falling from $54,000 to $49,000 in value in just two hours. Ethereum similarly fell from an all time high of $4,300 to $3,700 over the course of the evening.
Dogecoin, the meme currency popularized by Musk, followed the trend, dropping 10 cents in value between the time of Musk’s tweet and the time of writing. Doge is currently trading for 42 cents a coin, with trading websites like TradingView downgrading the cryptocurrency to “sell” status.
The announcement has garnered a mixed review from retail investors on Twitter, with some praising Musk for his environmental conscientiousness.
Others have been far more critical of the decision, pointing out that the vast majority of the electricity in the U.S. (the primary source of energy for Tesla’s vehicles) is produced using fossil fuels like coal.
Some have even accused Musk of market manipulation, suggesting that he held a short position on bitcoin prior to the tweet.
Musk announced back in February that Tesla would be accepting bitcoin as payment for their vehicle, purchasing $1.5 billion worth of the cryptocurrency for trading purposes. Tesla sold 10% of this bitcoin share sometime in the first quarter of 2021 for an estimated profit of $100 million.
According to the tweet, Tesla is currently researching coins with a lower power consumption that is “<1% of bitcoin’s power draw.” Many dogecoin enthusiasts have taken this as a sign that Tesla will accept doge as payment, given its power draw of just 0.12 kilowatt hours per transaction.