Artur Widak | NurPhoto | Getty Images
GUANGZHOU, China – Hundreds of billions of dollars were wiped from the entire cryptocurrency market after Tesla CEO Elon Musk tweeted that the electric vehicle maker would stop buying cars with bitcoin.
According to Coinmarketcap.com, the value of the entire cryptocurrency market was around $ 2.43 trillion at around 6:06 a.m. Singapore time on Thursday when Musk made the announcement.
By 8:45 a.m., market cap had dropped to around $ 2.06 trillion and wiped out around $ 365.85 billion. The market has reduced some losses. Since Musk’s tweet, the cryptocurrency market had lost $ 165.75 billion in value at around 9:22 a.m. Singapore time.
In February, Tesla announced in a filing for approval that it had purchased $ 1.5 billion worth of Bitcoin and planned to accept the cryptocurrency for payments.
Citing environmental concerns Thursday, Musk said Tesla was “concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, particularly coal, which has the worst emissions of any fuel.”
Bitcoin is not issued by a single entity such as a central bank. Instead, it is maintained by a network of so-called “miners”. These miners use specially designed computers that use a great deal of energy to solve complex math puzzles in order to make Bitcoin transactions. Bitcoin’s energy consumption is higher than in some individual countries.
At around 9:34 a.m. Singapore time, Bitcoin fell more than 12%, falling below the $ 50,000 mark for the first time since April 24, according to CoinDesk data. Despite the recent decline, Bitcoin is still up over 400% in the past 12 months.
Other cryptocurrencies Ether and XRP were also significantly lower.
Musk was a big advocate of digital currencies like Bitcoin and Dogecoin and has helped drive prices up over the past few months.
Tesla CEO said the company will not sell Bitcoin and intends to use it for transactions “once mining moves to more sustainable energy.”
Bitcoin has piqued interest over the past year as companies like Square and Tesla announced Bitcoin purchases and large institutional investors entered the cryptocurrency space. Large investment banks like Goldman Sachs and Morgan Stanley have also been looking for ways to give their wealthy clients exposure to Bitcoin.