It’s another wild day in the world of cryptocurrency. And a bad one at that if you’re an investor in bitcoin. That’s because, as of the time of this writing, bitcoin’s price is crashing. Bitcoin is down a staggering 13% in the past 24 hours, dropping from around $57,000 per coin to around $49,600. So what’s driving the drop?
Elon Musk (of course).
Yesterday, Musk tweeted that Tesla would suspend vehicle purchases using bitcoin as a payment option. However, unlike other of Musk’s comments about cryptocurrency, this was more than just an off-the-cuff remark. Musk gave a good reason for his decision to suspend bitcoin as a payment option for Tesla purchases: the environment.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said. Those concerns are valid, as peer-reviewed studies have shown the energy (and thus environmental) cost of mining bitcoin can outweigh any economic benefits. Of course, this is Elon Musk and cryptocurrency and the future of digital tokens we are talking about, so naturally, the internet and stakeholders hunkered down on all sides after Musk’s comments.
Fellow billionaire Mark Cuban’s hot take was bitcoin is actually good for the environment because: gold.
We at https://t.co/VUydpLFzGh will continue to accept BTC/Eth/Doge because we know that replacing Gold as a store of value will help the environment https://t.co/bs7NvnJY8A and https://t.co/ELhbuLOBRV shrinking big bank and coin usage will benefit society and the environment https://t.co/zu08F0STEQ
— Mark Cuban (@mcuban) May 12, 2021
Several bitcoin Twitter accounts accused Musk’s statement of being deceitful and self-serving.
He's manipulating price so he can buy more.
— bitcoin.txt (@bitcoin_txt) May 13, 2021
Other people shot back that bitcoin will somehow save the planet.
Which contributes more damage to the environment?
A) An inflationary monetary system that MUST "grow" forever (and will manipulate money to ensure it)
B) A system that fixes A. (and as a byproduct, drives a renewables industry faster. #bitcoin saves the planet!
— Jeff Booth (@JeffBooth) May 13, 2021
Some big investors came out to announce they’re hitting the cable news shows to talk about how bitcoin is good for the environment (again).
I’ll be on @SquawkCNBC tomorrow morning at 6:50am EST to explain why Bitcoin is good for the environment.
Time to put an end to this nonsense.
— Pomp ???? (@APompliano) May 12, 2021
Then there’s whatever this is:
— Dave Portnoy (@stoolpresidente) May 12, 2021
But what does Musk’s decision (and all the pushback) mean for bitcoin going forwards? Look, no one knows, and if they say they do they are lying. Bitcoin has become much more “respectable” over the last few years but, relatively speaking, the entire cryptocurrency ecosystem is still nascent—and extremely volatile—and no one knows what bitcoin is going to do today, tomorrow, or next month.
— Elon Musk (@elonmusk) May 13, 2021
If Musk’s tweet (and the helpful follow-up, above) accomplishes anything it is that it helps put a spotlight on the real-world impact bitcoin and other cryptocurrencies have on the environment, which is a conversation the world should be having—and bitcoin enthusiasts should want to have—if there’s any hope of the coin becoming a true instrument of economic value for everyday people in the future without destroying the planet.