Elon Musk, the CEO of Tesla, tweeted earlier this Sunday that the electric carmaker would resume Bitcoin transactions once verified crypto mining operations used more renewable energy.
“When there’s confirmation of reasonable (~50 percent) clean energy usage by miners with [a] positive future trend, Tesla will resume allowing Bitcoin transactions,” he wrote.
This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.
When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.
— Elon Musk (@elonmusk) June 13, 2021
Tesla was one of the first companies to accept Bitcoin payments on its independent node earlier this year. Unlike others, the EV manufacturer intends to keep its cryptocurrency payments in that form rather than convert them to fiat. The news propelled an already-rising Bitcoin and the cryptocurrency market to new highs in April.
However, in May, Tesla abruptly stopped accepting Bitcoin payments, citing concerns about Bitcoin’s massive energy consumption and the use of fossil fuels in crypto mining. Musk chastised digital currency for being too energy intensive and reliant on fossil fuels. Investors and traders were also concerned that Tesla had divested itself of its massive Bitcoin position on its balance sheet.
The news caused Bitcoin to fall by more than 40% from its all-time high, resulting in one of the worst monthly losses in recent history.
Whether or not the Tesla CEO’s points were valid, they raised serious concerns about Bitcoin’s long-term viability. In the midst of the growing debate, miners and asset managers sought more environmentally friendly solutions. One asset manager, for example, has applied to establish a carbon-neutral Bitcoin ETF that would use blockchain technology to validate its carbon credit purchases.
Related Reading | Crypto Asset Manager One River Files for Carbon Neutral Bitcoin ETF
Musk’s cautious optimism towards the major cryptocurrency uplifted investor spirits, as Bitcoin rose nearly 15%. The CEO also confirmed that Tesla had only sold 10% of its holdings to “confirm BTC could be liquidated easily without moving [the] market.” Just hours following his tweet, Bitcoin surged from $35,000 to $40,000 overnight.
According to data from the Cambridge Center for Alternative Finance, approximately 39 percent of crypto mining is powered by renewable energy — not so far from Musk’s proposed figure of 50 percent.
Elon Musk’s influence on Bitcoin and its price action is undeniable, whether you like it or not. Change — or progress — is undoubtedly on the horizon, with Bitcoin miners now having more incentive than ever to integrate renewable energy into their operations.
Featured image from UnSplash