On Sunday, June 13, Tesla’s CEO Elon Musk tweeted that the company might reinstate Bitcoin transactions if the cryptocurrency’s mining efforts become more eco-friendly. The tweet caused a sharp increase in the market value of Bitcoin and other cryptocurrencies.
Musk was previously accused of manipulating the cryptocurrency market, which made him respond with the following tweet:
“This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market. When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”
The fuss began back in May when Musk announced that Tesla would no longer be accepting Bitcoin transactions due to the currency’s mining process relying heavily on fossil fuels. Bitcoin’s value dropped more than 10% following the famous tweet, in which Tesla’s CEO stated that cryptocurrency had a great future ahead of it, just not at such a high cost to the environment.
You can see a trend here. After Musk’s latest tweet about potentially restoring support for the famous cryptocurrency, Bitcoin’s value went over $39,000 on Sunday. According to Coinbase, it jumped even more on Monday, going above $40,000 at one point. These sudden fluctuations are forcing investors and miners to constantly review Bitcoin exchange rates to see where their investments stand.
As usual with these Bitcoin surges, other cryptocurrencies were also affected. Ether was up to nearly $2,600, while Dogecoin went up to a record-high of $0.3377 on Monday morning.
According to The Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s annual electricity consumption is estimated at around 10.78 gigawatts. To put things in perspective, this level of energy use is equivalent to the yearly carbon footprint of Argentina.
Energy consumption is this high due to the challenging nature of Bitcoin mining. Miners must use their hardware to solve and create new and complex transactions within the Bitcoin blockchain. The process requires special equipment and intense processing power, which, combined with the number of Bitcoin miners worldwide, leads to excessive energy consumption.