An about-face on Bitcoin (CCC:BTC-USD) acceptance by Tesla (NASDAQ:TSLA) is roiling cryptocurrency-related stocks on Thursday morning. Worst hit is miner Marathon Digital Holdings (NASDAQ:MARA), which fell almost 12% after hours yesterday and is down that much and more in pre-market trading.
Crypto acolyte and Tesla founder Elon Musk on Wednesday evening tweeted that the electric vehicle maker “has suspended vehicle purchase using Bitcoin.” “We are concerned about rapidly increasing use of fossil fuels” for mining and transaction, he wrote, calling out coal as having “the worst emissions of any fuel.”
Shares of Riot Blockchain (NASDAQ:RIOT) joined MARA stock in double-digit declines. Coinbase (NASDAQ:COIN) and MicroStrategy (NASDAQ:MSTR) shares fell about 7% each.
Not to be outdone, Mark Cuban responded to Musk’s tweet and the TSLA payment change with an endorsement for cryptocurrency use by his businesses. “We at Mavs.com will continue to accept BTC/Eth/Doge because we know that replacing Gold as a store of value will help the environment, shrinking big bank and coin usage will benefit society and the environment.”
Crypto Stocks Saw Earlier Boost From TSLA Plans
In what many saw as a balance sheet sleight of hand, Tesla in February announced a $1.5 billion investment in the cryptocurrency. It also revealed plans to start accepting it as a form of payment. For a leader of the electric vehicle revolution, the move surprised many investors.
Why? Bitcoin mining emits 36.95 megatons of CO2 annually. That’s equal to the emissions of about 8 million traditional internal combustion engine automobiles, according to the U.S. EPA. That total is more than the annual number of vehicles produced by Ford (NYSE:F) and General Motors (NYSE:GM) combined.
Critics argued that if Musk truly cared about the environment, he would take a stand against Bitcoin. Now he apparently has.
While Musk’s latest tweet said Tesla won’t be selling any of its Bitcoin, further purchases aren’t likely. Despite Cuban’s endorsement, Tesla’s decision could dissuade other companies from adding Bitcoin to their balance sheets, further pressuring the crypto stocks.
Earlier today, BTC-USD fell to a low of $46,294 from $54,800. Prices have since rebounded as of 7:45 a.m., Eastern, trading for around $50,000.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News, McKinsey & Co. and McDonald & Company Investments.
