Last week out of the blue, Tesla CEO Elon Musk announced that Tesla would no longer accept bitcoin payments citing environmental concerns. This has caused Bitcoin to lost $500 billion in a single day. As of May 17th, Bitcoin prices had lost 10% and are trading at $42,600.
On May 16, Elon Musk sent a Tweet that reads, “Bitcoin is actually highly centralized, with supermajority controlled by a handful of big mining (aka hashing) companies. A single coal mine in Xinjiang flooded, almost killing miners, and the Bitcoin hash rate dropped 35%. Sound “decentralized” to you?” By taking a jab at Bitcoin, Musk’s Tesla has decided to discontinue BTC payments.
Things are not looking too bright for BTC if it fails to hold above $40K. It was only on April 14 that the leading cryptocurrency bitcoin reached its all-time high. However, the sudden steep fall in price may indicate that Tesla has already sold its BTC holdings. Although this directly does not point to only one electric car company, in reply to ongoing speculation regarding this matter has confirmed everyone’s suspicion.
This indeed comes as a shock to a lot of people since Elon Musk has been one of the most influential billionaires to be vocal about and supporting cryptocurrencies, especially bitcoin. A news source has mentioned, “Earlier this year, Tesla’s decision to add bitcoin to its balance sheet got him raved by the crypto community and making the decentralized cryptocurrency more mainstream.”
The sudden withdrawal from and disdain for bitcoin from Musk does not make sense to many people. Although in a Twitter spat, Musk has called bitcoin “highly centralized” and previously confirming that Tesla has sold its bitcoin holdings, Musk has again clarified that the speculations that Tesla has sold its bitcoin holdings are not true.