On Wednesday, Tesla suddenly announced it suspended accepting Bitcoin payments, in a surprising change of pace that Wedbush says could harm the company in the long run.
According to Business Insider, Wedbush’s Dan Ives said in a note Thursday that Tesla’s decision to suspend Bitcoin payments is “very surprising and confusing,” especially given Tesla’s astounding Bitcoin capital gains in the first quarter.
Tesla Sold Some Bitcoin in Q1, Earns $272 Million in Proceeds https://t.co/IgIaxp012Y
— TeslaNorth.com (@RealTeslaNorth) April 26, 2021
In the note, Ives wrote, “For Tesla and the stock, not accepting bitcoin does not change the thesis or growth trajectory for the EV story, however, it does add to the noise and volatility around the name at a time in which risk assets are under enormous selling pressure on the Street with Tesla leading the charge.”
Ives continued, “Musk is now concerned about the use of fossil fuels in bitcoin mining and transactions, yet the nature of bitcoin mining has not changed in the last three months, which speaks to why backtracking on the crypto transaction three months later is a very surprising and confusing move to both Tesla and crypto investors.”
While Tesla stated they will still use Bitcoin when cryptocurrency “mining transitions to more sustainable energy,” which has been a criticism of environmental critics since the company announced it would be buying Bitcoin and accepting payments in the digital currency.
Last month, Ives stated that Tesla could be headed for 900,000 deliveries in 2021, while internal estimates from Tesla predict its factories may be able to produce a million cars per year.