Tesla, led by Elon Musk, confirmed it bought around $ 1.5 billion worth of bitcoin in January and expects it to be accepted as payment in the future.
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Bitcoin price is again approaching $ 40,000 after Tesla CEO Elon Musk tweeted this he had active discussions with Bitcoin miners about the sustainability of the digital coin.
Bitcoin traded at around $ 37,961.32 on Tuesday at 5:54 a.m. ET, and its price has increased over 4% in the past 24 hours, according to CoinDesk.
Almost all other major cryptocurrencies are also trading higher.
The price of Ethereum has increased more than 13% in the past 24 hours to $ 2,550.62 while the price of dogecoin has increased more than 7% to 34 cents per coin.
A small handful of lesser-known cryptocurrencies like Tether and Dai have seen their prices drop in the past 24 hours, but the drops are negligible.
Bitcoin, the world’s most popular cryptocurrency, jumped minutes after Musk tweeted, “Speaking to North American bitcoin miners. They pledged to publish current and planned renewable energy uses and to ask WW miners to do so. Potentially promising. “
The coin initially popped 4% and hit $ 39,824.81 a few hours later before falling back to nearly $ 38,000.
Michael Saylor, CEO of Microstrategy, followed Musk’s tweet and said he hosted a meeting between the Tesla CEO and some bitcoin miners that led to the formation of the Bitcoin Mining Council, which will promote sustainability.
Bitcoin mining requires enormous amounts of energy. As a result, Bitcoin has a carbon footprint comparable to that of New Zealand and, according to Digiconomist, produces 36.95 megatons of CO2 annually.
Musk has been a big proponent of cryptocurrencies and sparked price hikes on digital coins, including Bitcoin, several times over the past year. His tweets and comments around the cryptocurrency often make prices go up or down.
In a February SEC filing, Tesla announced that $ 1.5 billion worth of Bitcoin had been purchased and would be accepted as a form of payment. The company later announced that it posted $ 101 million in net income from the sale of Bitcoin for the quarter, which helped push its net income to a record high in the first quarter.
However, Musk’s relationship with digital coin appeared to be changing earlier this month. He tweeted on May 12 that the company had “suspended” bitcoin vehicle purchases amid concerns over the “rapidly increasing use of fossil fuels” for bitcoin mining.
Bitcoin’s rally this week comes after the turmoil in the crypto markets, which saw the price drop below $ 32,000 on Sunday.
The crypto sell-off last week came after authorities in China and the US tightened regulations and tax compliance on cryptocurrencies.
Chinese authorities on Friday called for stricter regulation of crypto mining and trading, and the U.S. Treasury Department announced on Thursday that it would require stricter compliance with the IRS by crypto.
– Additional coverage from CNBC’s Jessica Bursztynsky.