$473 billion wiped off cryptocurrency market after Elon Musk tweet about Tesla, Bitcoin

Elon Musk shocked the cryptocurrency world market on Thursday – announcing that Tesla will no longer accept bitcoin as payment.

Elon Musk’s announcement Tesla would stop accepting Bitcoin as payment today wiped hundreds of billions of dollars from the cryptocurrency market.

The falls came as the world’s richest man tweeted that his carmaker would no longer accept bitcoin, citing his concerns over carbon emissions produced by the currency.

At 8.06am AEST when Musk made the announcement, the world’s cryptocurrency market was valued at about US $2.43 trillion, according to Coinmarketcap.com.

By 10.45am the cap had dropped to 2.06 trillion — a loss of $473 billion (US $365.85) billion.

Bitcoin alone has seen $165 billion wiped from its value since 11.22am.

The CEO of Tesla Motors cited environmental concerns about bitcoin mining in his announcement of the change.

Bitcoin mining uses vast amounts of energy to power specialised computers solving complex but useless mathematical problems.

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Elon Musk’s announcement that Tesla would suspend vehicle purchases using bitcoin sparked a furious response. Picture: AFP

Elon Musk has copped criticism on social media for the change. Picture: AFP

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Musk said he and the company had become “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.

“Cryptocurrency is a good idea on many levels and we believe it has a promising future but this cannot come at the cost of the environment.

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to a more sustainable energy.”

The company said they would also look to invest in other types of cryptocurrencies, providing they used less than one per cent of the energy used by bitcoin transactions.

It has been calculated that bitcoin mining uses the same amount of energy annually as the Netherlands did in 2019, according to data from the University of Cambridge and the International Energy Agency.

U-turn for Tesla founder

But the announcement heralds a huge turnaround for Mr Musk, coming just a few months after the billionaire announced that Tesla would invest $1.95 billion in the cryptocurrency as well as accept it as payment for cars and other products.

The market reacted quickly to the news, with bitcoin falling from $67,000 to $60,000 before recovering ground.

Tesla’s stock price has also taken a hit, dropping 4.42 per cent.

The reaction on social media was also swift.

Mr Musk copped criticism for the environmental impact of Tesla’s production process and his aerospace company SpaceX.

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Tesla & Bitcoin pic.twitter.com/YSswJmVZhP

— Elon Musk (@elonmusk) May 12, 2021

If @elonmusk thinks mining #Bitcoin on unused and wasted energy is bad for the environment,
wait until he hears how bad EV batteries are! 😬

— Mark Moss (@1MarkMoss) May 13, 2021

I refuse to believe one of the smartest people on Earth - @elonmusk - JUST realized Bitcoin uses electricity. @APompliano we need to get to the bottom of this lol

— Andrei Jikh (@andreijikh) May 13, 2021

I see what the play is @elonmusk 👀 $Doge is the future cryptocurrency. He Asked if Tesla should accept #dogecoin, then stops accepting Bitcoin. Watch the next move 🐕🚀🌚 #ImAllIn

— Lil Mook (@Lilmook4real) May 13, 2021

I just bought some more #bitcoin, thanks Elon!

— Lark Davis (@TheCryptoLark) May 13, 2021

#Bitcoin is the best use of electricity.

— Vivek âš¡ (@Vivek4real_) May 13, 2021

The environmental impact from Bitcoin (all cryptos) mining was brewing here and Elon Musk got ahead of the news cycle. https://t.co/8l5eWdyNel

— Edward Moya (@edjmoya) May 12, 2021

One tweet a whole crypto market is down. @elonmusk
Power.#Bitcoinpic.twitter.com/BoM5wm9RUk

— Vishalojha🇮🇳 (@OjhaBaba_96) May 13, 2021

Edward Moya, a senior market analyst at currency trading firm OANDA, said that Mr Musk had moved ahead of investors focused on sustainability.

“The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market,” Mr Moya said.

“Over the past couple of months, everyone disregarded news that bitcoin uses more electricity than Argentina and Norway.”

Chris Weston, head of research at broker Pepperstone in Melbourne, said the Tesla founder’s reaction was a blow to bitcoin. He described the move as an acknowledgment of the currency’s carbon footprint, the Guardianreported.

“Tesla has got an image of being environmentally friendly and bitcoin clearly is the opposite of that,” Mr Weston said.

Chinese miners are responsible for about 70 per cent of bitcoin production, according to the

University of Cambridge’s Centre for Alternative Finance.