Tesla and its CEO rocked the crypto world last month when the EV maker decided to shut down bitcoin payments for its products just two months after their initial authorization. In addition to the immediate negative impact on the crypto market (read that bitcoin’s price plummeted immediately after the news), it caught the world’s attention as the issue of BTC energy consumption was hotly debated within and outside the community.
The main question arises from Tesla’s reasoning. The company said the decision came after becoming concerned about “the rapidly growing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels.”
As a carbon-neutral company, Tesla’s move is quite understandable, even if one ignores the actual energy required to develop and power the company’s cars.
However, Elon Musk is one of the most prominent inventors and the brightest entrepreneur of our generation. Therefore, it would be reckless to believe that he and the company he managed the first official payments to use BTC (and buy $1.5 billion in assets) before conducting a proper study.
Canadian businessman, writer, and politician Kevin O’Leary puts forward a theory about Tesla shareholders.
“Elon was pressured, I believe, by the shareholders of Tesla to speak out about this because they live with sustainability committees, and they’re not on the side with Bitcoin being used as a currency to buy Tesla cars. And so they probably pressured him to make the statement he made.”
O’Leary also said he understood Tesla’s decision, saying the company “repeats what every institution is saying – they need answers to questions about sustainability”. You can’t just burn coal to mine bitcoin. This should stop when you want an institution. “
Entrepreneurs challenge those involved in BTC and dig to solve ESG (environmental, social and management) issues.
This standard, known for decades, has become significantly more important to investors in recent years. In addition to balance sheets, potential ROI, and other financial data, potential investors review them because they represent the environmental, social, and governance impacts of the underlying asset.
The ESG criteria are widely used in traditional finance, but are relatively new to BTC, possibly initiated by Musk. However, these institutions that represent the traditional financial world need to let that happen before they rush in and buy bitcoin, O’Leary said.