A U-turn by Tesla Inc. on Bitcoin last week sent the cryptocurrency market plunging by hundreds of billions of dollars and caused some loyalists to change their tune against CEO Elon Musk.
Musk cited concerns about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal,” in a Twitter post saying Tesla would stop accepting the digital currency for vehicle purchases. The reversal came just two months after Tesla sparked a Bitcoin rally by announcing it had invested $1.5 billion in the currency and would begin accepting it from buyers.
The about-face happened a few days after a comment Musk made while hosting “Saturday Night Live” caused another cryptocurrency, Dogecoin, to lose significant value. Musk called Dogecoin “a hustle” on the late-night sketch comedy show, during which he portrayed Wario from Nintendo’s Super Mario Bros. franchise and also disclosed that he’s on the autism spectrum.
Dave Portnoy, the Barstool Sports founder who has become a stock market and cryptocurrency pundit, blasted Musk for “pulling the levers like the Wizard of Oz on crypto” and said he was no longer an “Elon fanboy.”
“Elon Musk just tried to tank Bitcoin,” Portnoy said. “Yeah, the same Elon Musk who had Bitcoin on Tesla’s spreadsheet and their balance sheet so Tesla can show a profit at the end of a quarter because they’re not selling cars, now suddenly Bitcoin’s bad.”
In the hours after Musk’s tweet, cryptocurrencies lost $365 billion — more than four times the value of General Motors.
Musk said Tesla would keep its Bitcoin holdings and resume acceptance after mining — the energy-intensive process of creating bitcoin using high-powered computers — switched to more sustainable energy sources.
“He’s still beating the drum,” Robert Lutts, chief investment officer at Cabot Wealth Management in Massachusetts, told Reuters. “He’s a master of marketing. … Everyone in the world is talking about Elon Musk and Bitcoin right now. Is that good for selling cars? Damn right, it is.”