The electric carmaker said in May that it would no longer accept the cryptocurrency for purchases.
Electric-car maker Tesla Inc (TSLA.O) will most likely restart accepting bitcoin as payments once it conducts due diligence on the amount of renewable energy used to mine the currency, Chief Executive Officer Elon Musk said at a conference on Wednesday.
Bitcoin was up 8% at $32,160.16, while ether surged 11.6% to $1,993.36. Tesla's shares were down 0.8% at $655.30 in extended trading.
Tesla first started accepting bitcoin as payment for its electric cars in March, but discontinued the practice in May due to environmental concerns about fossil fuels being used to mine the cryptocurrency.
During his appearance at the B Word conference Mr Musk said that, along with the Bitcoin owned by Tesla and his his rocket company SpaceX, he personally held Bitcoin and the cryptocurrencies Ethereum and Dogecoin.
Now, Musk said that the energy being used to mine bitcoin is becoming greener, which could prompt Tesla to reinstate payments.
"I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50%, and that there is a trend towards increasing that number, and if so Tesla would resume accepting bitcoin" Musk said.
Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is "mined" using vast amounts of electricity generated with fossil fuels.
“If the price of bitcoin goes down, I lose money,” he said. “I might pump, but I don’t dump. I definitely do not believe in getting the price high and selling or anything like that, so I would like to see bitcoin succeed.”