Cryptocurrencies Rebound As Elon Musk Hints At Tesla Re-Accepting Bitcoin Payments

The global cryptocurrencies rebounded on Wednesday as short-sellers closed their positions as Tesla CEO Elon Musk made an appearance at the highly-anticipated B-Word Conference.

Bitcoin traded as high as $32,815 before easing to $31,717 as of report time as Elon Musk renewed bullish hopes that the electric carmaker will most likely restart accepting bitcoin as payments once it conducts due diligence on the amount of renewable energy used to mine the currency.

“I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number, and if so Tesla would resume accepting bitcoin,” Musk said. “Most likely the answer is that Tesla would resume accepting bitcoin.”

Elon Musk speaking at the B-word conference with Twitter CEO Jack Dorsey and Ark's Carthie Wood

Musk boosted bullish sentiment as he announced that SpaceX, one of the companies he founded, holds bitcoin on its balance sheet. Musk also stated that he personally owns ether. The announcement contributed to the rising prices across cryptocurrencies on Wednesday with ether breaking above $2,000 for the first time since July 14.

“I might pump, but I don’t dump,” Musk said. “I definitely do not believe in getting the price high and selling ... I would like to see bitcoin succeed.”

The use of bitcoin to buy Tesla’s electric vehicles had highlighted a dichotomy between Musk’s reputation as an environmentalist and the use of his popularity and stature as one of the world’s richest people to back cryptocurrencies.

Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.

More digital currency miners, however, are making attempts to use renewable energy to mitigate the impact on the environment.

“Tesla’s mission is accelerating the advent of sustainable energy. We can’t be the company that does that and also not do appropriate diligence on the energy usage of bitcoin,” Musk said.

There is also word that environmental concerns are starting to wane as miners adjust operations to reduce their carbon footprint. The result could encourage those larger investors waiting for an appropriate time to allocate money to cryptocurrencies while fulfilling their environmental, social, and governance (ESG) mandate. 

Open interest, or the number of futures contracts traded but not squared off with an offsetting position, reached the highest tally since May 18 on Tuesday, according to data from the blockchain analytics firm Glassnode. The dollar value of the number of contracts open however remained flat at around $12 billion.