Bitcoin falls below $ 50,000 as Musk criticizes its energy use

Elon Musk criticized cryptocurrency mining for the second time for using fossil fuels to supply its energy demand.

Tesla Inc. CEO Elon Musk redoubled his attack on Bitcoin’s energy demands, calling recent consumer trends “insane.”

Also read: Bitcoin rivals gold

Musk posted a graph on Twitter from the University of Cambridge showing that Bitcoin’s electricity consumption has exploded this year. It is the second day he has criticized cryptocurrency mining for using fossil fuels and comes after an announcement that Tesla would suspend Bitcoin car purchases.

The turnaround of one of the loudest believers in cryptocurrencies took investors by surprise and caused prices to plummet across the board. Bitcoin plunged 10% in early US trading to less than $ 50,000. Exchange operator Coinbase Global Inc. sank 2% in the previous market and other tokens, including Ether and Dogecoin, plummeted.

Here you can see the electricity consumption index of Bitcoin according to the University of Cambridge: https://cbeci.org/

“Bitcoin is also a manifestation of the value of the Internet, and therefore it stands to reason that social media and celebrity worship have, and will continue to have, an effect on driving demand,” said Stephen Kelso, Director of ITI Capital markets.

Mining the token consumes 66 times more electricity than at the end of 2015, according to a recent report by Citigroup Inc.

Musk noted Wednesday that Tesla could accept other cryptocurrencies if they consume less power and said the company will not sell any of its bitcoins.

It is unclear what prompted the decision and Musk and Zachary Kirkhorn, Tesla’s chief financial officer, did not immediately respond to an email inquiry for comment. Kirkhorn added the tongue-in-cheek title “Coin Master” in March, according to a regulatory document.

Still, Musk’s tweets raise questions about the attractiveness of Bitcoin as an investment at a time when institutional companies are increasingly vocal about climate change and environmental issues.

“Surely he would have done his due diligence before accepting Bitcoin?” said Nic Carter, founding partner of Castle Island Ventures and a leading voice among advocates of Bitcoin’s energy use. “It is very strange and confusing to see this rapid change.”

Musk’s decision in February to buy $ 1.5 billion worth of Bitcoin and plan to accept it as a form of payment has been a major catalyst in the bull market for cryptocurrencies. In the eyes of analysts, it helped add legitimacy to the token and usher in new investors.

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Musk’s crypto tweets have often been a hoax, and his attention to Dogecoin brought the hoax token into the mainstream. He joked about being the “Dogefather” in the past and tweeted Tuesday: “Do you want Tesla to accept Doge?”