Elon Musk has announced that Tesla has suspended vehicle purchases using bitcoin, resulting in the cryptocurrency crashing. His tweet made the price of Bitcoin dropped by about 5% in the first few minutes of announcement.
Here is Elon Musk’s tweet:
Based on the data from US Securities Exchange Commision (SEC), Tesla announced the purchase of $1,5 billion worth of Bitcoin and will continue to invest in more cryptocurrency in the futures. The unexpected news comes after Mr Musk has been a prominent advocate for the cryptocurrency throughout the year. In March, the chief executive tweeted in the middle of the night US time: “You can now buy a Tesla with Bitcoin.”
He went on to clarify that Tesla would keep the money received as cryptocurrency, rather than converting it into a fiat currency such as dollars.
“Tesla is using only internal & open source software & operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency,” he said in another tweet. “Pay by Bitcoin capability available outside US later this year.”
Mr Musk announced his support for the cryptocurrency in January this year, after changing his Twitter bio to “#bitcoin”, alongside its “B” symbol.
In January, bitcoin was worth around $30,000 and $40,000, and was worth $57,000 by March - meaning Tesla had made between $630 million and $1.35bn from its investment.
Mr Musk's tweets will not be seen favourably by bitcoin advocates, especially due to its effect on the market. However, this is not the first time the CEO has been criticised for the financial ramifications of his tweets.