Musk makes screeching bitcoin U-turn cryptocurrency

Tesla boss says you CAN’T buy cars with

THE price of bitcoin plummeted after top backer Elon Musk renounced the digital currency.

In a U-turn, the Tesla boss said his electric car maker would no longer accept bitcoin as payment due to concerns about its ‘insane’ environmental impact.

Until now, Musk was one of the biggest supporters of cryptocurrencies, tweeting about them regularly and causing spikes in their value.

Just three months ago, Tesla also spent more than £1bn on buying up bit÷ SCOTTISH Mortgage has sold 80pc of its shares in Tesla over the past twelve months.

Britain’s oldest investment trust has long been one of the electric car maker’s top backers, making huge profits from its surging stock price.

But it has trimmed its holding as fund managers turn their attention away from the US and towards China.

Co-manager Tom Slater said this was part of efforts to stay ‘diversified’, while his partner James Anderson said their enthusiasm for Silicon Valley giants had ‘waned’.

Slater said Tesla has created value by forcing ‘a hostile investment community to reconsider its position’ on electric cars. But it has fallen from the trust’s second-biggest holding to its fifth. coin. But Musk’s shock decision sent the crypto-currency plunging by more than 10pc, wiping tens of billions of pounds off its value.

Having peaked above $60,000 last month, it fell to around $46,000, its lowest level since March 1.

The 49-year-old (pictured) said Tesla would refrain from selling bitcoin or accepting it as payment until ‘mining’ – the process by which new bitcoins are generated – could be done in a more eco-friendly fashion.

He said: ‘We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.’

The billionaire followed the statement with a tweet describing energy usage related to bitcoin recently as ‘insane’, hitting the price further.

However, he suggested Tesla was still open to using other digital currencies if they were found to be greener. AJ Bell analyst Laith Khalaf said backers would now be wondering ‘where this leaves the future’ of bitcoin.

‘Tesla and bitcoin were always odd bedfellows, given the environmental credentials of the electric car maker, and the colossal amount of energy consumed by the cryptocurrency,’ he added.

Jeffrey Wang, head of Americas at Amber Group, a cryptocurrency service provider, said broader selling of risky assets was another factor behind Wednesday’s bitcoin plunge and Tesla’s decision ‘was kind of the straw that broke the camel’s back’.

Bitcoin and other cryptocurrencies are based on digital ledger technology known as the ‘blockchain’, a shared database of all transactions. Transactions are computed by a network of users – known as ‘miners’ – who are rewarded with more bitcoins.

But as more bitcoins enter circulation, the reward for processing them reduces – and miners need more computing power to extract them. These computers consume enormous amounts of electricity and the vast majority of mining is currently done in China, where coal accounts for 60pc of electricity generation.

David Gerard, an author and prominent bitcoin critic, has claimed bitcoin ‘runs on coal’ and has a ‘ghastly and egregious’ environmental impact.