The price of bitcoin hit a three-week high on Monday, climbing back above $40,000 after Elon Musk said that Tesla would resume allowing transactions made in the digital currency once crypto mining becomes greener.
The electric car company’s latest change of direction on its acceptance of bitcoin once again highlighted the continuing ability of Tesla’s billionaire chief executive to influence the price of bitcoin and other cryptocurrencies.
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions,” Musk said in a tweet on Sunday.
The price of one bitcoin climbed to a high of $41,033 (£29,063) on Monday before slipping back to $40,580, still up more than 12% from its price before Musk’s tweet.
Musk, one of the most high-profile proponents of cryptocurrencies, also said that Tesla sold about 10% of its holdings to confirm bitcoin could be liquidated easily without moving the market.
He announced in May that Tesla would no longer accept bitcoin for car purchases, citing long-brewing environmental concerns for a swift reversal in the company’s position on the cryptocurrency. In February, Tesla revealed it had bought $1.5bn of bitcoin and would accept it as a form of payment for cars. But the cryptocurrency’s production is at odds with the company’s mission toward a “zero-emission future”.
Bitcoin fell more than 10% after Musk’s tweet in May. He said that he believed cryptocurrency had a promising future but it could not be at great cost to the environment.
The energy used to produce bitcoin alone is equivalent to the annual carbon footprint of Argentina, a tool from researchers at Cambridge University that measures the currency’s energy use.
Bitcoin mining – the process in which a bitcoin is awarded to a computer that solves a complex series of algorithms – is deeply energy-intensive. Because there is a finite number of bitcoins that can be mined – 21m – computers have to solve harder and harder algorithms in order to get bitcoin. The special equipment and intense processing power use a lot of electricity – as much as some entire countries
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