Elon Musk announces suspension of Bitcoin Tesla purchases
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Bitcoin has seen a sudden drop in value over the past few hours, with a single Bitcoin down by more than $7,000 (£5,000). The drop was largely linked to Elon Musk’s tweet confirming that Tesla won’t be accepting the cryptocurrency as payment any longer.
Bitcoin is a type of cryptocurrency that was first invented in 2008.
It’s a decentralised digital currency, which means it doesn’t need a central bank to oversee transfers.
Bitcoins were created as a reward for digital mining – a type of record-keeping that uses large amounts of computer processing power.
But mining has a relatively large carbon footprint as it uses a lot of electricity.
Musk tweeted that Tesla wouldn’t be using Bitcoin as a type of payment anymore, owing to climate change fears.
“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,” he said.
“Cryptocurrency is a good idea… but this cannot come at great cost to the environment.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”
After Tesla’s announcement, Bitcoin saw a sudden drop in value.
Shortly before Musk tweeted, Bitcoin was trading at around $54,602.
But just over two hours later, the price had fallen to $47,720.
It was the lowest price for Bitcoin since April 25, when it hit a new low of $47,273.
But, the crypto has still seen a 75 percent rise in value since January, and this time last year was worth less than $10,000.
Should you buy Bitcoin?
As with any cryptocurrency, you should think very carefully before jumping straight in.
Bitcoin is highly volatile, and there’s absolutely no guarantee of success.
Musk himself has recently urged caution about investing in digital currency.
Earlier this month, he tweeted: “Cryptocurrency is a good idea… but this cannot come at great cost to the environment.”
He linked to a video of an interview he held with TMZ, in which he added: “People should not invest their life savings in cryptocurrency, to be clear.
“[But] if you want to speculate and have some fun — there’s a good chance that crypto is the future currency of Earth.
“Then it’s like, which one is it going to be? Maybe there will be multiple. But, it’s all speculation at this point.”
You should only buy Bitcoin if you’re absolutely sure that you can afford to lose the money.
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