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Bitcoin drops as Elon Musk says Tesla won't take it

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The price of bitcoin fell below $50,000 Thursday morning after Tesla CEO Elon Musk tweeted a day earlier that the electric car maker would stop accepting the digital currency as payment for its vehicles. (May 13)

Video Transcript

DAN IVES: Yeah, this is a U-turn for Elon Musk who's been one of the biggest proponents of Bitcoin and crypto, saying now Tesla will not take Bitcoin transactions for its cars. Three months ago, they said they would. So it's a huge about face. Really a head-scratching move that sent a shock to the system for crypto, especially with Musk being one of the biggest torchbearers for crypto. I mean, nothing's changed in the crypto mining process over the last three months.

And I think that's really what's been the gut punch here for crypto investors, is for Musk to go all in three months ago and now basically do a 180 U-turn, which really came out of nowhere. I mean, this came out of left field. And also just adds to more volatility and risk in the market. You're seeing that with Tesla at a time where the street's glass-half-empty on tech and electric vehicles stocks with a risk off. And you go back to early February, remember Tesla also, they bought $1.5 billion of Bitcoin.

And they've made more, from a profit perspective, on Bitcoin than they have from selling off cars over the last year. But with Musk, you never know what's around the corner. And I think that's what's added a bit to what's surprising investors, especially on the crypto side, for one of their biggest proponents to all of a sudden do a U-turn.