What’s Been Happening Between Elon Musk and Bitcoin?
Posted 23 May 2021
It seems like a day does not pass without some fresh news piece concerning Elon Musk, Twitter, Bitcoin crypto currency and Tesla. With cryptocurrency’s popularity and value seeming to surge and drop on the Twitter whims of Musk.
Musk’s tech legacy, his involvement with PayPal, Tesla and other innovative companies rendered it basically inevitable that he would eventually get involved with cryptocurrency. As a step further than PayPal, cryptocurrency removes the need for centralised third-party processors entirely, making it an innovation akin to the creation of services like PayPal itself.
Elon Musk –The Mischievous Prince of Tech
Musk holds the positions of CEO, chief designer and co-founder at Tesla, SpaceX, OpenAI, The Boring Company and Neuralink. These innovation-based tech companies straddle a range of industries covering electric vehicle development and manufacturing, aerospace, neurotechnology and AI. Initially starting out as a founder of PayPal, an early online payment processing service. PayPal boasted over 325 million users last year, effectively changing the way internet users sent money and paid for products and services.
Elon’s Initial Scepticism of Crypto Currency
During a 2014 interview, Musk was questioned about cryptocurrency, stating that Bitcoin was “probably a good thing,” but going on to say that it will end up “primarily a means of doing illegal transactions,”. Going on to clarify that that is not “necessarily entirely bad,” as “some things maybe shouldn’t be illegal.”
He also stated at the time that he did not own any Bitcoin. At the time, Bitcoin was dropping in value from the high of $1,156 (£816.93). This drop continued for another three years, nicknamed the “crypto winter”. As of 2017, Bitcoin exploded beyond $8,000 (£5,653) up to over $20,000 (£14,133). Some articles even postulated that Musk himself might have created Bitcoin.
Cybercrime in His Name
With so few safeguards in place and as the new Wild West of financial technologies, cybercrime was always going to be inevitable when it came to Bitcoin and crypto currency.
Musk collided with this darker side of crypto in 2018 when two major brands Twitter pages were hacked by fraudsters, who then changed the two pages to resemble Musk’s own page, creating a fake crypto give away that managed to steal around $150,000 (£106,000) from victim’s funds before being stopped by Twitter. Musk did not make any direct statement on this incident.
Elon’s Change of Heart
As we rolled into 2019, Musk started looking more seriously at cryptocurrency. Leading to the most exciting developments in the Bitcoin/Musk story. He was beginning to think more about the role cryptocurrency was set to play from the angle of his business models and technology.
On a podcast in 2019, he referred to Bitcoin’s structure as being brilliant, also commenting on Ethereum. Although he acknowledged the problematic energy costs of cryptocurrency, especially considering Tesla’s energy-conscious outlook. In that sense, it is hard to view Bitcoin as being a major element of Tesla, given their environmental outlook. Considering the massive amounts of energy required to mine cryptocurrency.
Tesla and Bitcoin
Finally, we reach the February 2021 announcement that Tesla had bought $1.5 billion (£1.06 billion) in Bitcoin with the intention of accepting Bitcoin as payment for Tesla cars and other products. This led to an all-time high for Bitcoin, landing at $58,000 (£41,000).
This leads us to the troubling issues of Musk’s direct influence over the value of crypto currency. With plenty of debate over the worrying implications about a currency that can be influenced by one man’s tweeting. There are several issues and implications that need to be faced in any conversation about the future of cryptocurrency. That is, if you accept the idea that Musk had a direct influence on the value of Bitcoin. Which is increasingly hard to deny.
A major worrying turn was Tesla’s May 2021 announcement that Tesla would not be accepting Bitcoin as payment. This was primarily due to energy concerns inherent to the computational power required to mine cryptocurrency. This sent Bitcoin crashing down to $43,000 (£30,000).
Musk Still Supports Bitcoin Crypto Currency
Despite the shifts in the Musk/Bitcoin story, as of Saturday May 22nd, 2021, there was a development. Musk tweeted that he still supported Bitcoin in the battle between crypto currency and traditional fiat currencies. Tweeting that the “true battle is between fiat & crypto. On balance, I support the latter.”. Seemingly as a result, Bitcoin rose, coming to rest at around $38,000 (£27,000) later the same day.