BERKLEY, RAW – Tesla boss Elon Musk has denounced the “insane” amount of energy used to produce bitcoin, doubling down on his sudden rejection of the cryptocurrency as a means of payment over environmental concerns.
Musk, one of bitcoin’s most ardent backers, tweeted a graph of bitcoin’s power consumption and said: “Energy usage trend over past few months is insane.”
That followed his tweet from Wednesday saying Tesla would no longer accept the cryptocurrency as payment for its electric cars because it came at a great cost to the environment, an about-face from his stance in March.
Bitcoin, which sank 17 per cent to its lowest since March 1 on Wednesday after Musk’s comments, climbed back to $US50,360 ($A65,148) on Thursday.
Other cryptocurrencies including ether also fell before regaining some ground. Coinbase, the biggest US cryptocurrency exchange, was down two per cent.
Tesla shares ended down 3.08 per cent to $US571.69, the lowest level since March 8.
Tesla revealed in February it had bought $US1.5 billion of bitcoin, turbo-charging the crypto market. In April, the firm said it trimmed its position by 10 per cent in the first quarter, booking a net profit of about $100 million.
Musk said on Wednesday that Tesla would retain its bitcoin holdings with the plan to use the cryptocurrency as soon as mining transitions to more sustainable energy sources.
Tesla’s decision not to accept bitcoin payments “allows him to appease critics while still keeping bitcoin on his balance sheet”, said Meltem Demirors, chief strategy officer at digital asset manager CoinShares Group.
Musk announced on Sunday that his commercial rocket company SpaceX would accept dogecoin as payment to launch a lunar mission next year – just hours after he sent the cryptocurrency spiralling downward when he called it “a hustle” during a guest-host spot on the Saturday Night Live TV show.
Musk said on Thursday he was involved in work to improve dogecoin’s transaction efficiency, sending the price of the cryptocurrency jumping as much as 20 per cent.
“Working with Doge devs to improve system transaction efficiency. Potentially promising,” Musk said on Twitter.
Some Tesla investors and environmental campaigners have been increasingly critical about the way bitcoin is created or “mined” – high-powered computers compete to solve complex mathematical puzzles in an energy-intensive process that often relies on fossil fuels, particularly coal.
Musk, who has championed bitcoin, said he backed that concern, especially the use of “coal, which has the worst emissions of any fuel”.
If bitcoin were a country, it would use about the same amount of electricity a year as Switzerland does, Deutsche Bank analysts said.
Musk reaffirmed he remains a strong believer in cryptocurrencies and was looking at other cryptocurrencies that use less than one per cent of bitcoin’s energy.