Per a tweet from Elon Musk today at 6pm, Tesla will no longer accept Bitcoin as payment for vehicle purchases. An abrupt reversal from Elon Musk's previous acceptance of Bitcoin, he cited that Tesla is "concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."
The full statement can be found below:
Musk states in this statement that Tesla did not have any immediate intentions of selling any Bitcoin nor will Tesla not consider it as a form of payment in the future. This could set up Tesla and Elon Musk to, down the road when they see fit, reinstate Bitcoin as an acceptable form of payment. Regardless, the market immediately had a sharp negative reaction to the comment, unsurprisingly.
Visible in the chart above is the immediate sell off of Bitcoin following Elon Musk's tweet. Following the statement at 6pm, Bitcoin has since fallen over 8% on the day as investors unload their holdings. The most interesting part of the statement was the final sentence stating that the company is open to considering alternative cryptocurrencies using <1% of Bitcoin's energy consumption. This opened the statement up to a numerous amount of possibilities should Tesla ultimately allow different existing cryptocurrencies as payment instead of Bitcoin. A move like that could have lasting ramifications for the overall cryptocurrency market should a decoupling of any correlation to Bitcoin occurred through an event such as this.
Different projects were quick to respond to the tweet in hopes of gaining interest from Tesla. One of which was Algorand, a project that currently claims to be negative carbon emitting as a network. Tezos was another project that chimed in with their own reply to Elon Musk.
The possibility of Tesla adopting different alternative projects as acceptable forms of payment is exciting. This could potentially open up the door for alt coins to gain more and more popularity, removing any lasting correlations with major caps like Bitcoin, creating a new market functionality in the crypto space. Investors should expect some volatility over the short term as the market continues to adjust to the news. For now, any insight into which cryptocurrency, if any, will be taken on by Tesla as a replacement to Bitcoin, is purely speculative. As more information comes out from Elon Musk and Tesla over the next days and weeks, more analysis can be conducted on Elon Musk's probable moves regarding cryptocurrencies.
