Bitcoin Jumps After Musk Says Tesla Will Use When Mining Cleaner
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Elon Musk said Tesla Inc. would allow transactions in Bitcoin once mining is done with more clean energy.
The executive said in a tweet that he wants miners to use about 50% clean energy. The Cambridge Center for Alternative Finance has estimated that 39% of crypto mining is powered by renewable sources, mainly hydroelectric.
It shows that Musk still sees a future for wider Bitcoin adoption after he criticized the digital currency for being an energy hog and relying too much on fossil fuels. Bitcoin jumped 9% on Sunday and traded at $39,580, near a two-week high, as of 8 a.m. in London on Monday.
“Elon’s stance seems to be moderating and providing a target that’s not far away,” said Jonathan Cheesman, head of over-the-counter and institutional sales at crypto derivatives exchange FTX. “The rally was already underway as the market speculates about an imminent purchase from MicroStrategy and the G-7 comments on crypto were neutral, even optimistic, about digital innovation.”
MicroStrategy Inc., whose chief executive officer Michael Saylor has become a vocal Bitcoin evangelist, last week boosted a junk-bond offering for the purposes of buying the cryptocurrency to $500 million from $400 million.
Musk has whipsawed Bitcoin and other digital tokens in the past few months. In February, Tesla announced it had bought $1.5 billion in Bitcoin and signaled its intent to start accepting Bitcoin as payment for vehicles. In March, Musk tweeted, “you can now buy a Tesla with Bitcoin,” only to say in May that the practice was suspended due to concerns about fossil-fuel usage for Bitcoin mining and transactions.
Musk’s post on Sunday was in reply to a report in CoinTelegraph, which cited Magda Wierzycka, executive chair of South African asset manager Sygnia, as saying Musk’s recent tweets on Bitcoin should have prompted an investigation by the U.S. Securities and Exchange Commission.
“We may soon be closer to 50% than you think,” Fred Thiel, CEO of Marathon Digital Holdings Inc., said of Musk’s threshold for clean-energy usage. “There is already a big shift happening as China shuts down Bitcoin mining operations in provinces that were primarily powered by coal.”
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