- Crypto fans decried Elon Musk’s unexpected decision to halt bitcoin payments for Tesla cars.
- Some argued bitcoin mining mostly uses renewable energy, rather than fossil fuels.
- Billionaire Mark Cuban said his NBA team will continue to accept cryptocurrency payments.
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The crypto community was swift to reject Elon Musk’s decision late on Wednesday to halt payment in bitcoin for Tesla vehicles due to environmental concerns, suggesting that renewable energy is largely used to mine the popular cryptocurrency.
“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a tweet Wednesday.
Here’s how some bitcoin bulls reacted to Musk’s announcement:
“Ironic because no incremental energy is used in a #bitcoin transaction. The energy is used to secure the crypto-asset network, and the net impact on fossil fuel consumption over time will be negative, all things considered.” – MicroStrategy CEO Michael Saylor.
“Elon probably did not research how much energy is required to run other (non crypto) currencies that Tesla accepts.” – Binance CEO Changpeng Zhao.
“Elon … you realize that 75% of miners use renewable energy, right? This energy story has been debunked over and over again.” – Morgan Creek Digital co-founder Anthony Pompliano.
“When Elon realizes that bitcoin mining is actually pushing the renewable energy industry forward, he will refresh position and #bitcoin will moon.” – co-founder and president at crypto exchange Gemini Cameron Winklevoss.
“FWIW, Bitcoin mining is a massive subsidy for renewable energy.” – co-founder and CEO at Gemini Tyler Winklevoss.
“We at Mavs.com will continue to accept BTC/Eth/Doge because we know that replacing gold as a store of value will help the environment and shrinking big bank and coin usage will benefit society and the environment.” – Dallas Mavericks owner and investor Mark Cuban.
Novogratz and El-Erian were less at odds with Musk:
“My take on @elonmusk is to take him at his word. He cares about the environment and he is using his considerable influence to push BTC mining towards a greener future. Lots of companies in the space have already been working on this. Stay tuned. And buy $BTC.” – Galaxy Digital CEO Mike Novogratz.
“This unexpected development has placed pressure on #Bitcoin. @elonmusk and @Tesla were front runners in the process of private sector adoption of the #crypto #currency, opening the way for others to follow. The reasons for this apparent U-turn are not yet clear.” – Allianz chief economist and president of Queens’ College, Cambridge University Mohamed El-Erian.
Musk appears to have changed his stance
The self-proclaimed “Technoking” had only recently agreed with Twitter boss Jack Dorsey by saying bitcoin “incentivizes” renewable energy. Dorsey’s Square payments company and Cathie Wood’s Ark Invest asset management firm had collaborated on research that suggested bitcoin mining isn’t environmentally-damaging.
He now says Tesla will look at using other cryptocurrencies that take up less than 1% of bitcoin’s energy use for transactions.
Bitcoin dropped as much as 15% at one point following Musk’s tweet to trade around $46,350, but recovered to around $50,850 as of 3:45 a.m. ET on Thursday.
“In some capacity, distancing the brand from bitcoin could win some ESG love,” Chris Weston, head of research at Pepperstone Financial, said.