It is now more than 3 years since Elon Musk decided to stop supporting Bitcoin as a means of payment for the purchase of electric vehicles from his production company Tesla Motors, highlighting the degrading energy impact of Bitcoin mining.
Today, things seem to have changed significantly, with the crypto notably becoming more eco-friendly to the point of meeting the minimum sustainability criteria previously indicated by Musk himself.
Is there a possibility that Tesla will use Bitcoin as a payment currency again? We will see that in this article.
Elon Musk, Tesla and Bitcoin: A Story of Love and Hate in 2021
In February 2021, at the dawn of the last bull run, Elon Musk monopolized the market’s attention by announcing a Bitcoin purchase operation through his company Tesla Motors for a total amount of 1.5 billion dollars.
Immediately after the EV car manufacturer began accepting cryptocurrency as a possible payment currency for the purchase of electric cars, starting an era of expansion of the cryptographic sector within the world of large companies.
However, the party lasted very little, because just 2 months later, in May 2021, Elon Musk decided to withdraw and stop the integration of Bitcoin in Tesla’s circuits, citing environmental concerns.
In fact, Tesla has always been a company with a vision focused on environmental respect and a mission aimed at spreading and promoting the culture of renewable energy worldwide.
The process of mining Bitcoin in 2021, according to what was reported by Musk, used too many fossil fuels and went against the values that led the car manufacturer until then.
Tesla stopped referring to Bitcoin from that point on, and indeed in the second quarter of 2022, in the midst of the bear market, it decided to quietly sell (at a loss) 75% of the shares bought the previous year sell.
As of today, the company still represents the third largest holder of the orange coin, for a total of 9,720 coins purchased at an average cost of $337 million, now worth $641 million.
Although Tesla has disappeared from the crypto radar without publicly referring to Bitcoin anymore, its founder Elon Musk has addressed the topic several times on X.
In addition to hosting a few “Space” where he discussed the topic and praised the community of other cryptocurrencies such as Dogecoin, Musk explicitly said at the time that he would consider the idea of including Bitcoin as a means of payment in Tesla reconsider if produced. has become sustainable for at least 50%.
This means that at least half of the Bitcoin mining industry must have been powered by renewable energy sources (solar, wind, etc.).
BTC Increasingly Eco-Friendly: Will It Be Accepted Again by Tesla?
More than 3 years after the love and hate story between Musk, Tesla and Bitcoin, many things have changed. Over time, the pressure of world governments on the mining industry to comply with ESG factors and the institutional appreciation of the cryptocurrency led to a concrete reduction in the commitment to fossil fuels in this highly controversial practice.
Furthermore, several technological advances have been made, making cryptocurrency mining increasingly energy efficient.
According to what is reported from the graph of sustainable energy use in Bitcoin mining, modeled by the venture capitalist in the field of climate technology Daniel Batten and the data analyst Willy Woo, the sustainability of the crypto is currently at its historical highs around the value of 55 %.
This means that more than half of Bitcoin mining is powered by renewable energy sources, with a strong positive trend observed from the second half of 2021, right after Tesla’s historic U-turn.
Although the minimum sustainability level desired by Musk has been reached, it is not guaranteed that Tesla will resume support with Bitcoin payments.
First, as noted by the data analyst and researcher at the Vrije Universiteit Amsterdam and De Nederlandsche Bank Alex de Vries, most of the statements about the energy impact of Bitcoin mining lack transparency and verifiability. Here is what he reported in an interview:
“The Bitcoin mining industry likes to talk about transparency until specific data is requested.”
The analyst specified how even the United States Energy Information Administration (EIA) had a somewhat opaque direct experience with the mining sector, only to be sued by the giants Riot Platforms and the Texas Blockchain Council.
In particular, De Vries argues that the miners have made some “absurd claims” about the use of renewable energy, and thinks Musk is aware of the misleading data.
Alexander Neumüller, a researcher at the Cambridge Center for Alternative Finance (CCAF), believes that current methodologies for deriving Bitcoin’s electricity mix are inaccurate because they are based on hypotheses rather than certain and verifiable data.
For example, the Bitcoin Mining Council, an association of miners founded after the issue with Tesla, already claimed in mid-2023 that the sustainable use of electricity by the global mining sector amounts to 59.9%.
The problem is that this data, obviously falsifiable, comes from his investigations of miners in North America.
In any case, according to reliable data from the Cambridge Bitcoin Electricity Consumption Index (CBECI), the use of coal has remained fairly stable in recent years, slightly decreasing from 40% to 36%.
From here we can conclude that the trend of Bitcoin mining is moving towards an increasingly user-friendly situation, although it is not yet empirically above 50% of energy sustainability.
The analysts at CBECI say that if gas and nuclear power were included among sustainable energies, the rate of renewable energy use by Bitcoin mining would be 63%. However, if both are removed from the equation, the rate drops to 28%.
In the midst of these inaccurate data, Tesla and Elon Musk did not expose themselves in a decision that would most likely open public debates potentially dangerous for the public image of the electric vehicle manufacturer, always focused on energy sustainability.
It is clear that if the current trend continues undisturbed in the coming years, sooner or later we will have reliable data certifying the surpassing of 50% of renewable energy sources, in which case Musk will be “forced” to publicly announce it acknowledge.
If the integration with Tesla is to resume and the crypto is re-allowed as a means of payment, then we will definitely have a new wave of global attention, with a focus that will most likely shift to speculation, which will push BTC to new all-time highs drive.
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