Bitcoin on Monday surged to above the $40,000 mark after Tesla CEO Elon Musk hinted that his company may once again resume Bitcoin transactions.
Musk had initially sent Bitcoin and other cryptocurrencies into a tailspin after the billionaire investor announced that his company, citing environmental concerns, was suspending the use of Bitcoin to purchase vehicles. He cited concerns about the environmental toll of mining for Bitcoin, especially in places like China that use coal-fired energy.
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Musk revealed the conditions for Tesla to begin accepting Bitcoin again and said that it would happen when Bitcoin mining becomes more environmentally friendly.
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” Musk said in response to an article posted on Twitter.
Bitcoin began to increase from $36,000 after the post and, by Monday morning, had risen to about $41,000. Ethereum, the second-largest cryptocurrency by market cap, increased from about $2,350 to just above $2,550. Dogecoin, a “meme coin” that has been touted by Musk in the past, increased in value by about 7% in the last 24 hours.
The news was a shot in the arm for investors after Bitcoin and other cryptocurrencies limped through the past few months. The cryptocurrencies experienced the headwinds of possible government regulation and issues with mining in China, which has resulted in dropping prices.
Bitcoin landed at above $63,000 in mid-April before the cryptocurrency slide began, while Ethereum reached more than $4,100 — both all-time records.
Following Musk’s first missives about the environment and Bitcoin, interest in greener cryptocurrencies has grown. To mine for Bitcoin, high-powered computers are used to create rigs that verify virtual coin transactions. Many of those rigs are located in China. Because it is responsible for about half of the world’s coal energy generation and is the leading emitter of carbon dioxide on Earth, the environmental toll of mining there is high.
“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,” Musk said at the time. “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
Musk also sent Bitcoin spiraling when he posted a meme of a couple breaking up and captioned the tweet with #Bitcoin and a broken heart emoji.
Another factor likely driving up Bitcoin’s price is billionaire investor Paul Tudor Jones, who on Monday said that he is a fan of the cryptocurrency.
“I like bitcoin as a portfolio diversifier. Everybody asks me what should I do with my bitcoin? The only thing I know for certain, I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities,” he said on CNBC.
Other bullish signs for Bitcoin include financial services giant Goldman Sachs recently labeling Bitcoin a “new asset class.” Carlyle Group co-founder and investor David Rubenstein also said that he has invested in companies that facilitate cryptocurrency trade.
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