Musk’s worries drop crypto-linked stocks
Tesla CEO cites high energy use in production
Stocks exposed to cryptocurrencies slumped globally after Elon Musk voiced concerns over Bitcoin’s energy usage, delivering a blow to the digital money’s standing within global markets just a few months after the Tesla Inc. boss became one of its biggest supporters.
Crypto shares from the U.S. to Asia slid as Bitcoin plunged as much as 15%, sinking to as low as $46,045 before trimming the decline. The drop came as Musk said he was worried over the “rapidly increasing” use of fossil fuels for Bitcoin
mining and transactions, and suspended Tesla purchases with the asset, indicating he might favor other cryptocurrencies with much lower energy usage.
Digital asset technology company Marathon Digital Holdings Inc. fell nearly 14% in trading Thursday. Riot Blockchain Inc. fell more than 16%, while Microstrategy Inc., which has put billions of dollars of its assets into Bitcoin, plunged about 10%. Coinbase Global Inc., the operator of the largest U.S. cryptocurrency exchange, fell 6.5%.
A “shocker from Musk,” wrote Wedbush Securities analyst Daniel Ives. “The nature of Bitcoin mining has not changed in the last three months, which speaks to why backtracking on the crypto transaction three months later is a very surprising and confusing move to both Tesla and crypto investors,” Ives said in a note to clients.
Tesla announced in February that it invested $1.5 billion in Bitcoin and signaled an intent to begin accepting the cryptocurrency as a form of payment.
In Asia, Monex Group Inc., whose ownership of crypto exchange Coincheck Inc. had made it the second-bestperforming stock in Japan in 2021, dropped 11%. Nexon Co., which just last month became the first Japanese firm to make a significant bet with a $100 million purchase of the cryptocurrency, slumped 14%, the most since August 2019, though a poor growth outlook given at its earnings also weighed on sentiment.
In Europe, crypto-miner Argo Blockchain Plc slid 16%, blockchain technology firm On-Line Blockchain Plc lost 11% and crypto infrastructure group Northern Data AG dropped 12%.