A cryptocurrency expert has claimed the reason why Elon Musk said Telsa would no longer accept payments in Bitcoin was due to the carmaker hoping to gain access to renewable energy credits from the Biden administration. Last week it was reported that Tesla was seeking entry into the multi-billion dollar US renewable fuel credit market. George Tung of Cryptosrus has claimed Telsa does not want to hurt its chances of gaining this credit because of being associated with Bitcoin, which is perceived as a fossil fuel energy-intensive technology.
Mr Tung of Cryptosrus claimed: “Tesla has a pending application at the US Environmental Protection Agency tied to renewable power generation and fuel credits.
“Tesla wants access to this energy credit and needs to satisfy the EPA’s green energy targets.
“The real reason for the Bitcoin U-turn is because the company is afraid that taking payment with the cryptocurrency may hurt its chances in gaining access to the billions of dollars in renewable energy credit.”
On Thursday, Mr Musk tweeted that Tesla would no longer accept Bitcoin as payment until Bitcoin mining can be done without using fossil fuels.
Mr Musk tweeted: “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.”
Bitcoin mining is the use of computer processing power to run an algorithm that generates new Bitcoins.
There has been concern over the energy usage trend for cryptocurrencies because of the intense computer processing power used to “mine” coins.
Selling pressure from investors and entities that own large amounts of Bitcoin has increased since Mr Musk’s announcement.
However, the overall market capital invested into Bitcoin and cryptocurrencies, in general, is up on last week.
This could be due to investors believing that the cryptocurrency sphere is still in a bull market and are buying into the current dip in prices.
It comes after Tesla spent more than £1billion on buying up Bitcoin in January.
Mr Musk’s tweet sent cryptocurrency markets plunging by more than 10 percent.
However, on Friday the cryptocurrency market solidified on a resistance level and began to slowly rebound.
Last month Bitcoin reached a new all-time high of $60,000 (£42,550).
However, after Mr Musk’s tweet, the cryptocurrency fell to around $46,000 (£32,620), its lowest level since March 1.
Tesla has been contacted by Express.co.uk about the reasons behind the bitcoin u-turn, but has yet to reply.