US carmaker Tesla has backed away from accepting Bitcoin as payment for its electric vehicles, citing the enormous environmental cost of mining and processing cryptocurrency transactions.

In a Tweet posted on Wednesday, Tesla founder Elon Musk said the company would suspend vehicle purchases using Bitcoin.

He said, “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

His post immediately sent the price of Bitcoin plummeting. As of press time, the digital coin was trading at US$50,346, down 11.8 percent over the previous 24 hours.

Musk went on to say, “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at a great cost to the environment.

“Tesla will not be selling any Bitcoin, and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Bitcoin mining consumes more electricity annually than Argentina, according to a BBC report in February that cited data from Cambridge University, because the activity requires vast amounts of computing power to log and verify all transactions on the Bitcoin blockchain.