Why Did Elon Musk Suspend Bitcoin Vehicle Purchases at Tesla?

Elon Musk, serial entrepreneur, at TED2013: The Young, The Wise, The Undiscovered. Wednesday, February 27, 2013, Long Beach, CA. Photo: James Duncan Davidson

Elon Musk, the CEO of Tesla, the world renowned, American electric vehicle and clean energy company based in Palo Alto, California, announced earlier this week that Tesla would be suspending all Bitcoin vehicle purchases. This news came as a surprise, globally, since just a few months ago, Elon boasted about Tesla’s recent Bitcoin adoption and that the company has taken a step in investing in the controversial cryptocurrency.

Elon Musk’s announcement comes after he expressed his concern over the rapidly increasing use of fossil fuels in the bitcoin mining process. Musk is well-known for being very conscious of his carbon footprint and has embedded some of those principles into Tesla, who now manufactures electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tiles, as well as other related products and services.

Just minutes after Elon Musk made his announcement on Twitter, the price of bitcoin dropped by a reported 5%. Tesla, who owns $1.5 billion worth of Bitcoin, previously spoke about investing in other cryptocurrency in the future. In fact, Elon Musk contributed to the increasing value of Bitcoin in recent months.

Here is Musk’s Full Announcement on Twitter- 12 May 2021

Tesla is not the only company who has invested and adopted Bitcoin, among other cryptocurrencies. Square Metromile, Nexon and PayPal have rallied around Bitcoin and expressed that they believe that the cryptocurrency market is full of possibilities, especially in the wake of the COVID-19 pandemic.

According to reports, huge banks such as Goldman Sachs and Morgan Stanley have also grown curious about the possibilities Bitcoin could offer their clients. However, Bitcoin still has many critics and Elon Musk’s recent tweet regarding the suspension of Bitcoin purchases, has added to the skepticism.

What Will Tesla do with its $1.5 Billion Bitcoin Investment?

On Wednesday, Tesla announced that they plan to hold rather than sell off the Bitcoin they already own. They also announced that they will be looking to other cryptocurrencies that require less energy than bitcoin for transactions. Musk has always been a Bitcoin and Dogecoin enthusiast. In fact, this week Elon Musk spoke about Dogecoin during his debut on Saturday Night Live. Once would think that this immediately increased the value of Dogecoin, instead it is reported that the coin actually tanked by 30%.

It seems to be an interesting time at Tesla. We’re pretty sure that Elon Musk will keep us updated via his trending Twitter profile.