Share this article

Elon Musk Says Tesla Is Suspending Bitcoin Payments Over Environmental Concerns

However, Tesla will not be selling any of its bitcoin anytime soon.

By Zack Seward, Danny Nelson

Updated May 9, 2023, 3:19 a.m. Published May 12, 2021, 10:10 p.m.

In a tweet Wednesday, Tesla CEO Elon Musk said the electric-car company is discontinuing bitcoin payments.

STORY CONTINUES BELOW

Don't miss another story.Subscribe to the Crypto Long & Short Newsletter today. See all newsletters

By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy.

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Name (@elonmusk) May 12, 2021

Tesla had announced it was accepting BTC for car payments starting in February. The announcement came in concert with a $1.5 billion investment in bitcoin as a treasury asset.

Musk has since continued his championship of DOGE, the meme currency currently boasting a market cap of $58 billion, according to CoinDesk data.

Cryptocurrency “cannot come at great cost to the environment,” the electric carmaker said in a statement tweeted by Musk. The statement was hedged, but only slightly, with praise for crypto’s “promising future” and a promise to investigate less energy-hungry networks than Bitcoin’s.

Bitcoin, a proof-of-work (PoW) blockchain reliant on energy-intensive mining units, has come under fire from environmental groups as its price has surged to all-time highs. The second-largest cryptocurrency by market cap, ether, also relies on PoW but is in the process of switching to proof-of-stake.

Tesla's pledge turns up the heat on the race to move bitcoin away from fossil fuels. The company's decision to accept bitcoin was a watershed moment for corporate bitcoin adoption. Tesla's turnabout on environmental matters will likely give fuel to the social and even political moment clamoring for change to the world’s largest cryptocurrency by market cap.

The sudden freeze of Tesla’s bitcoin payments hands a decisive win to bitcoin’s energy critics. But it does not spell doom for Tesla’s remaining bitcoin investment nor its crypto experiment. “Tesla will not be selling any bitcoin,” the statement read. “We intend to use it for transactions as soon as mining transitions to more sustainable energy."

No such plans are publicly known. The most reputable report on the matter says nearly 40% of bitcoin’s energy consumption was carbon-neutral.

Tesla did test the liquidity of the bitcoin market with a $272 million sell announced during its most recent earnings call.

Bitcoin's price is now down nearly 6% over the past 24 hours, though it fell about $2,000 after Musk's tweet.

This is a developing story and will be updated.

Environment Bitcoin Tesla Elon Musk

Zack Seward

Zack Seward is CoinDesk’s contributing editor-at-large. Up until July 2022, he served as CoinDesk’s deputy editor-in-chief. Prior to joining CoinDesk in November 2018, he was the editor-in-chief of Technical.ly, a news site focused on local tech communities on the U.S. East Coast. Before that, Seward worked as a reporter covering business and technology for a pair of NPR member stations, WHYY in Philadelphia and WXXI in Rochester, New York. Seward originally hails from San Francisco and went to college at the University of Chicago. He worked at the PBS NewsHour in Washington, D.C., before attending Columbia’s Graduate School of Journalism.

Danny Nelson

Danny is CoinDesk's managing editor for Data & Tokens. He formerly ran investigations for the Tufts Daily. At CoinDesk, his beats include (but are not limited to): federal policy, regulation, securities law, exchanges, the Solana ecosystem, smart money doing dumb things, dumb money doing smart things and tungsten cubes. He owns BTC, ETH and SOL tokens, as well as the LinksDAO NFT.