Daily Market Recap – BTCUSD Down after Elon Musk denounces bitcoin's 'crazy' energy consumption

Tesla chief executive Elon Musk denounced on Thursday the “crazy” energy consumption of the production of bitcoin, hours after announcing that Tesla will no longer accept bitcoins for the purchase of its cars because their creation is too polluting.

Following this announcement, the price of the largest cryptocurrency fell as low as $46,710 before recovering. It is now down 1.29% to $48,796. “We are concerned about the increasing reliance on fossil fuels for Bitcoin mining (creation) and transactions, especially coal, which has the worst emissions of any fuel,” Elon Musk said on Twitter.

The price of bitcoin lost up to more than 10% after Musks 180 degrees turn on his previous enthusiasm for bitcoin. Earlier in March, the founder of the electric car manufacturer had announced that it was possible to buy a Tesla with Bitcoins, contributing to its legitimization.

“Cryptocurrency is a good idea in many ways and we think it has a great future, but it can't come at a huge cost to the environment,” Elon Musk said on Twitter on Wednesday.

On Thursday, he reposted on the social network a graphic illustrating the energy consumption of bitcoin with the comment: The evolution of energy consumption in recent months is crazy.

According to the Cambridge Centre for Alternative Finance, Bitcoin mining consumes 149.63 terawatt-hours per year, more than Sweden or Malaysia.

Tesla announced in February that it had invested $1.5 billion in bitcoin, the best-known cryptocurrency, and accepted it as a means of payment a month later, which contributed to a surge of about 20% in its price.

The group has since said it reduced its position by about 10% in the first quarter.

Some Tesla shareholders and environmental organizations have criticized the methods of “mining”, i.e., bitcoin creation, which requires increasingly important computing capacity, therefore becoming increasingly energy-intensive.

Elon Musk said he shared this concern, especially the use of coal “which has the worst emissions of all fuels”.

(Chart Source: Tradingview 13.05.2021)

Tesla will keep its bitcoins but with the intention of using them as soon as the “mining” of the cryptocurrency moves to more sustainable energy sources, he added.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.