Another electric car maker after Elon Musk announces it won’t accept Bitcoin

Electric car company Fisker Inc. does not have cars for sale or in production but has a clearly defined position on Bitcoin: No.

Henrik Fisker, CEO of the Los Angeles-based company, said he would not invest in Bitcoin or accept cryptocurrency as a form of payment.

He did not rule out the future use of a cryptocurrency, but told CNBC that Bitcoin was not a “durable solution.”

About 25 publicly traded companies invested a total of $ 4 billion in Bitcoin, and one analyst calculated that most had at least doubled their initial investment.

What is also clear is that Bitcoin is very volatile and the market is easily influenced by external events, such as a power outage in China which led to a ‘flash crash’.

Elon Musk said Tesla will not accept Bitcoin due to environmental concerns. In this photo, SpaceX owner and Tesla CEO Elon Musk poses on the red carpet for the Axel Springer Award 2020 on December 01, 2020 in Berlin, Germany.
Pool / Pool / Getty

Bitcoin has been hit by a series of seemingly contradictory tweets from Elon Musk, CEO of competitor Tesla.

But the fact that only one man can influence the price of Bitcoin suggests that the cryptocurrency lacks a solid foundation, and that may be part of the reason why Fisker wants to avoid it.

Musk drove up the price of Bitcoin when he announced a $ 1.5 billion investment in the cryptocurrency.

The price fell when Musk said the company would no longer accept it as payment, and some misinterpreted his comments to mean he had abandoned the Bitcoin investment. He hadn’t.

Bitcoin has a history of volatility, but the fact that Musk’s tweets can create manic price swings suggests he’s an outsized figure in a market filled with nervous retail investors.

Over time, major investors can dominate the market and smooth out manic price swings. But that day has not arrived.

While some may applaud Fisker’s comments, his concerns about Bitcoin may be largely irrelevant. Proponents claim that the cryptocurrency has evolved into a separate asset and has become a buy and hold bet on future price appreciation. Therefore, it makes no sense to spend a sizable asset like Bitcoin on an asset that depreciates like a car, proponents say.

Either way, Ethereum – the world’s second largest cryptocurrency by market cap – is built for trading, say cryptocurrency enthusiasts.

Fisker is apparently looking to avoid the debate and has said he wants to focus on building cars. But the man who seeks to build the “world’s most sustainable vehicles” has taken a hit on Bitcoin.

Fisker echoed Musk’s concerns about the amount of electrical energy used in mining Bitcoin.

“It’s not green,” Fisker told CNBC.

Fisker’s comments are unlikely to affect Bitcoin.

Fisker isn’t a celebrity like Musk, who touted his recent appearance on Saturday Night Live, and he does not playfully speculate on Dogecoin, a parody crypto launched in 2013, becoming the global currency.

Fisker probably had no intention of influencing the price of Bitcoin. But if he had, would anyone have noticed, especially in the crypto world?

Tesla shares recently traded at $ 586.62 per share, while Fisker shares returned $ 12.12 each.

This, Bitcoin supporters might argue, renders Fisker’s comments unnecessary.

At midday on Tuesday, Bitcoin changed hands to $ 42,996.45, down 0.39% in the past 24 hours but up 49.99% for the year. The all-time high is $ 64,829.14. The market capitalization is $ 804.57 billion, CoinDesk reported.

Market pulse

The International Energy Agency (IEA) has said the world cannot reduce net carbon emissions to zero by 2050 unless investments in new oil and gas projects stop immediately.

Logo of the International Energy Agency
The International Energy Agency (IEA) has said the world cannot reduce net carbon emissions to zero by 2050 unless investments in new oil and gas projects stop immediately.

The Organization of the Petroleum Exporting Countries (OPEC), which now controls around a third of the world’s oil supply, would order more than half by 2050 if fossil fuel supply were to decline as proposed by the IEA. .

A ban on the sale of vehicles powered by internal combustion engines would be needed by 2035 to achieve the target.

The IEA, based in Paris, is an international intergovernmental organization created in 1974. Its field of action has shifted from ensuring the stability of world oil supplies to the promotion of renewable energy sources.

The IEA has said achieving net zero emissions is necessary to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial levels, the target set in the 2015 Paris climate agreement. .

“Our roadmap shows that the priority actions that are needed today to ensure that the possibility of net zero emissions by 2050 – narrow but still achievable – is not lost,” said Fatih Birol, executive director of the IEA, in a press release. “The scale and speed of effort demanded by this critical and formidable goal – our best chance at tackling climate change and limiting global warming to 1.5 degrees Celsius – make it perhaps the greatest challenge facing the world. mankind has never been confronted. “

The IEA has said that most of the global reduction in carbon dioxide emissions by 2030 can be achieved through technologies currently on the market.

But by 2050, about half of the reduction is expected to come from technologies that are now prototypes or in the demonstration phase. The United States has proposed to cut emissions by 50% by the end of the decade. The European Union and the United Kingdom plan to achieve carbon neutrality by 2050.

Sales of electric cars and trucks totaled around 2.3 million in 2020, a 400% increase in five years, the World Economic Forum reported. The number of electric cars, buses, delivery vans and intercity trucks is expected to reach 145 million by 2030, the IEA said.

But concerted government action could increase the number of electric vehicles to 230 million by the end of the decade, the agency said.

Electric cars of the Volkswagen group
Electric cars of the Volkswagen group. The company has announced that it will not develop any new internal combustion engines.

Herbert Diess, CEO of the Volkswagen Group, told CNBC that the German automaker has no plans to partner with Tesla, Elon Musk’s electric car company.

“No, we haven’t considered (that), we’re going our own way,” he told Squawk Box Europe last month. “We want to get closer and then overtake.”

The increase in the number of electric vehicles on the road will require an investment of billions of dollars to build charging stations and modernize the electricity grid. Then comes the issue of reliability, as utilities replace fossil fuels with renewable energy sources such as solar and wind.

Critics point to power outages in California during a heat wave last year and question the feasibility of the global transition to electric vehicles as planned, especially as coal and nuclear power plants are closed.

But the markets are betting on electric vehicles.

Tesla was added to the Standard & Poor’s 500 Index in December 2020, replacing the apartment investment and management company. The move underscored the growth and potential of Tesla and the electric car industry.

Many index funds, including pension funds, replicate the constituents of the S&P 500.

The S&P is weighted by market capitalization. It is a larger and more meaningful measure of market performance than the Dow Jones Industrial Average, which tracks 30 large companies.

By midday on Tuesday, shares of Chevron, ConocoPhillips and ExxonMobil were down.

About Robert Pierson

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