Why have Elon Musk and Tesla suddenly turned against bitcoin?

Elon Musk has performed a sudden U-turn on bitcoin over concerns about its energy usage, and says his electric car firm Tesla will no longer accept the cryptocurrency as payment – but will his decision have an impact, and could Tesla turn to an alternative currency? 

 Tesla bet big on bitcoin earlier this year with a $1.5 billion investment, and it paid off: Bloomberg estimates that the company made $1 billion on its purchase in the first quarter of 2021.

 At the time, Musk was criticised for investing in the cryptocurrency, with many people pointing out that the environmental damage caused by its large electricity usage was at odds with Tesla’s apparent green credentials. Now, Musk seems to have reached the same conclusion, tweeting on 12 May that Tesla would suspend bitcoin sales because of concerns 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 great cost to the environment,” he added.

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