Elon Musk Causes Bitcoin Prices To Leap
Tesla will accept the digital currency once it moves towards more environmentally sustainable practices.
Bitcoin saw an 11% price increase after Tesla CEO Elon Musk stated that his company will start accepting bitcoin once miners begin to use cleaner energy. Turning to Twitter, Musk said: “When there’s confirmation of reasonable (~50%) clean energy usage by miners with a positive future trend, Tesla will resume allowing Bitcoin transactions.”
Back in February, Tesla revealed that it had bought $1.5 billion of bitcoin and stated that it would accept the cryptocurrency on its cars. But, by last month, Tesla did a U-turn, announcing that its vehicles could no longer be purchased using the digital currency. Tesla said this was due to bitcoin’s increasing use of fossil fuels for its mining. The announcement resulted in the cryptocurrency crashing.
Analysis by Cambridge University suggests bitcoin currently uses more electricity annually than the whole of Argentina. The mining process to create new units of bitcoin involves solving complex mathematical equations, which is reliant on high levels of computer processing power. Many critics believe that there is no such thing as “green bitcoin” as miners will always opt for the cheapest option to maximise their returns. However, others believe that institutional investors can lead bitcoin down a more environmentally sustainable path. Yves Bennaïm, the founder of non-profit Swiss think tank 2B4CH, has argued that as big investors like Tesla boost digital currency prices, there’ll be a greater incentive for investments in renewable energy sources.