Elon Musk is right. Bitcoin could erase Tesla's strides toward a carbon-free future

• On Wednesday, Tesla suspended purchases of its cars with bitcoin.
• CEO Elon Musk cited the environmental impact of mining and trading on carbon emissions.
• Bitcoin has a growing carbon footprint and could soon become the 5th largest carbon dioxide emitter in the world.

Tesla suspended vehicle purchases made using bitcoin this week, just three months after announcing plans to accept the cryptocurrency as payment. That might be for the best.

CEO Elon Musk on Wednesday cited the environmental impact of bitcoin transactions for the electric automaker's decision to suspend the purchasing option.

"We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel," Musk said in a tweet.

Musk's decision sparked outrage on social media as #dontbuytesla trended on Twitter and users accused the CEO of market manipulation.

"All of a sudden, he's not so keen due to environmental concerns. But why now?" Nigel Green, CEO of the financial advisor deVere Group and a crypto supporter, said. "Those issues surrounding the environmental impact have not come up in the last few months."

But Musk's decision may have some weight behind it, especially considering the rise in bitcoin's energy consumption in recent years. Tesla's February investment of $1.5 billion worth of the cryptocurrency caused a surge in demand, further hiking up its value.

Environmentalists have long criticized bitcoin's environmental footprint, and Wall Street analysts seem to agree: Bitcoin mining could erase any gains made by electric vehicles to eliminate carbon emissions.

The cryptocurrency's energy consumption is linked to the computer calculations necessary every time a trade is made or a new bitcoin is minted. Thousands of computers connected network race to verify transactions and collect a reward for doing so. These processes rely on large amounts of computing power and electricity, which is often derived from fossil fuels, including coal - as well as the energy necessary to cool large computing arrays.

Over the last two years, as bitcoin has rapidly risen in popularity, so too have CO2 emissions from its mining. The cryptocurrency has caused emissions to increase by over 40 million tons, which would be equivalent to adding 8.9 million cars to roads, according to a report from Bank of America.

"We do not find many other human activities that have a higher carbon footprint per dollar of inflow," the analysts said.

BofA also found that the currency produces more greenhouse gases than American Airlines (one of the largest airlines in the world), as well as uses more energy than many countries, including Greece. BofA estimated that if bitcoin prices rose to $1 million, the cryptocurrency could become the fifth largest cause of CO2 emissions in the world.

After Musk dropped bitcoin as a Tesla purchasing option, the currency plunged as much as 15%, dipping below $50,000 - far from bitcoin's record high, near $65,000.