Elon Musk says Tesla will suspend vehicle purchases using Bitcoin, days after tanking the Dogecoin price

Elon Musk says Tesla has reversed a decision to accept Bitcoin for vehicle purchases, sending the crypto price sharply lower.

Elon Musk has the ability to move crypto markets, and regularly tweets about Dogecoin and Bitcoin.

Elon Musk has tanked the price of a second cryptocurrency in a week, sending Bitcoin more than 10 per cent lower by announcing Tesla would no longer be accepting the cryptocurrency for vehicle purchases.

It follows the price of Dogecoin dropping almost 30 per cent on the weekend after Mr Musk appeared on comedy show Saturday Night Live, when he made a joke admitting “It’s a hustle’’.

Mr Musk’s support for cryptocurrencies such as Bitcoin and Dogecoin has bolstered their prices this year, with his endorsement and moves by large institutions to set up crypto trading desks and investment vehicles adding to the credibility of the digital currencies.

Dogecoin has been volatile this year, with the cryptocurrency running up on the back of support from Elon Musk.

Mr Musk announced on February 9 this year that Tesla had bought $US1.5bn in Bitcoin and would soon after be accepting it as payment for Tesla vehicles.

The announcement sent the Bitcoin 16 per cent higher at the time to more than $US43,000.

Bitcoin is currently trading at $US49,131, however is down almost 15 per cent overnight after Mr Musk tweeted that Tesla would no longer be accepting Bitcoin for payments.

It has traded in a wide range in the past 24 hours, up as high as $US58,036 before pulling back to as low as $US46,294.

“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,” the chief executive of Tesla Motors said on Twitter.

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

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

“We are also looking at other cryptocurrencies that use (less than 1 per cent) of Bitcoin’s energy/transaction.”

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP

— Elon Musk (@elonmusk) May 12, 2021

Some critics online have questioned the move, pointing out that the vast energy needs of Bitcoin mining were well known long before Tesla decided to buy into the cryptocurrency.

Just two days earlier Musk tweeted a poll, asking people to vote on “Do you want Tesla to accept Doge?”

More than 3.9m people voted, with 78.2 per cent of respondents voting yes.

Musk’s Bitcoin announcement, made Thursday morning Australian time, has garnered more than 52,000 responses.

The crypto market is broadly lower over the past 24 hours, with Ethereum down 8.76 per cent, Cardano down 10.14 per cent, Dogecoin down 21.39 per cent and Litecoin off 18.28 per cent.