[Asia Economy Reporter Kwon Jaehee] Elon Musk, CEO of Tesla, suddenly announced on the 12th (local time) that Tesla would stop accepting Bitcoin payments, causing the price of Bitcoin to plunge by about 12%. This announcement came just over two months after Tesla had announced it would allow Bitcoin payments for its vehicles. Critics are saying that the cryptocurrency market is on a rollercoaster ride due to Musk's single statement.
On that day, Musk tweeted, "Tesla is suspending vehicle purchases using Bitcoin," explaining that "the rapid increase in fossil fuel, especially coal, usage in Bitcoin mining" was the reason.
Following Musk's sudden announcement, Bitcoin prices sharply dropped. According to CoinMarketCap, which tracks global cryptocurrency market conditions, as of 9:40 AM Korean time on the 13th, Bitcoin was priced at $50,361.56, down 11.95% compared to 24 hours earlier.
Musk further stated, "There is no doubt about the promising future of cryptocurrencies, but we cannot pay the price with the environment," adding, "We are looking for other cryptocurrencies that consume less than 1% of the energy used in Bitcoin mining."
Musk also added that Tesla would not sell the Bitcoin it currently holds.
Musk's single statement caused significant volatility in the cryptocurrency market, including Bitcoin and Dogecoin, sparking massive backlash from cryptocurrency investors worldwide. Investors are angry because Musk had repeatedly raised expectations by promoting cryptocurrencies on Twitter, only to cause a sudden price crash with his unexpected announcement. On social media, tweets accusing Musk of "betraying" cryptocurrency investors are the most prevalent.
Until now, Musk has made numerous public statements related to cryptocurrencies, greatly influencing their market prices. Earlier, Tesla purchased $1.5 billion (about 1.7 trillion KRW) worth of Bitcoin in February and announced it would accept Bitcoin as a payment method for its products, leading to a rally in Bitcoin prices. Musk also said he would invest more in Bitcoin and other cryptocurrencies in the future and referred to himself as the "Doge Father" (father of Dogecoin). On the 8th, he appeared on NBC's flagship comedy program "Saturday Night Live (SNL)" and mentioned Dogecoin; around his appearance, Dogecoin's price showed significant volatility. On the 9th, Musk announced that his private space exploration company SpaceX plans to pay for the 'DOGE-1 lunar mission' using Dogecoin.
In response, U.S. authorities are showing signs of incorporating cryptocurrencies into the regulatory framework. Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), said at a House Financial Services Committee hearing on the 6th, "The SEC is preparing guidelines related to cryptocurrencies, but Congress needs to step in to regulate." Janet Yellen, U.S. Treasury Secretary, also publicly described cryptocurrencies as "highly speculative assets" and expressed concern about "potential losses for investors."
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