Being Elon Musk on this planet has its own positives and negatives, especially in the crypto world. He has faced the nadir of having his image used as a prop in a cryptocurrency scam to become a major contributor to Bitcoin (BTC) reaching its lifetime high, Musk has tasted it all.
The Tesla boss has had a complex love-hate relationship with cryptocurrencies. Despite all ups and downs, Musk has been a key game changer for the crypto market itself. South Africa born American engineer Musk holds multiple c-suit positions in SpaceX, Tesla, OpenAI, Neuralink and The Boring Company.
Back in 1998, Elon Musk co-founded PayPal- one of the most successful online payment processing companies in the world. Reaching 325 million active users in 2020, it went on to revolutionize the way money transfers hands over the internet.
Musk brags a legacy in digital payments, technology and value exchange ecosystem, which are key components of the crypto industry. The biggest difference is that digital tokens take a step ahead with being a decentralized currency.
Elon Musk = Satoshi Nakamoto?
Twitter has been the pivotal platform for Musk’s communication on the cryptos, where, perhaps, he mentioned about them for the very first time. He has been allegedly called Satoshi Nakamoto, the anonymous founder of Bitcoin: the first-ever cryptocurrency.
However, Musk has refused and denied such allegations on multiple occasions. He has erupted multiple controversies for his commentary on Bitcoin and other cryptocurrencies in the past.
Musk’s scepticism at the time was justified for the entirety of 2014. Bitcoin was retreating from its then-all-time-high of around $1,156. A decline that would continue unabated for several years until the cryptocurrency’s spectacular recovery in late 2017.
This prolonged period of ‘crypto winter’ coincided with complete radio silence from Elon Musk on crypto, which was finally broken in November 2017.
An article titled “Elon Musk Probably Invented Bitcoin” was published on Medium – A thought based open publishing platform. It was authored by Sahil Gupta, who would afterwards go on to work as a software engineer for Tesla and then found his own company Spase.io.
Gupta provided mostly circumstantial evidence, such as Musk’s deep knowledge of global economics and cryptography, experience with the C++ programming language and his hallmark problem-solving approach, which made him one of the richest persons on the planet. Musk, as always, once again denied the claims on Twitter.
What changed his mind?
The series of events took a sharp U-turn recently and the latest saga of Musk and cryptos is perhaps the most exciting leg of their journey so far. So, the first chapter of modernity begins in 2019, when Musk stated that he was considering cryptocurrencies seriously.
His enthusiasm was elevated to both technology and as a potential component of his business models. In a podcast, Musk said that the structure of Bitcoin was quite brilliant, although he wasn’t quite ready at the time to leverage the computationally-intensive cryptocurrency technology in Tesla’s energy-conscious business.
Doge: Elon’s ‘Pet Crypto’
In April 2019, Elon Musk mentioned Dogecoin (Doge), a meme-based cryptocurrency, for the very first time. He took to Twitter to tweet: “Dogecoin might be my fav cryptocurrency. It’s pretty cool.”
Following this, the price of the meme token doubled in just two days. Musk continued to flirt with Dogecoin a few times after that and in December 2020, he provoked major swings in the price of the token. A one-word tweet saying “Doge” was enough to spark a 120% rally in the token in just four days.
Another post, criticizing Dogecoin’s highly unequal wealth distribution (62% of DOGE supply is held by 50 largest addresses, compared to Bitcoin’s 10.5%) resulted in a 20% price plunge.
There’s no denying the fact that Elon Musk’s one reaction to cryptocurrency, be it of any kind, shakes the market. In a recent incident, the Tesla boss changed his Twitter display picture to a snap of him wearing glasses reflecting the Doge image, which is Dogecoin’s symbolic Shiba Inu, making the cryptocurrency value jump wildly.
The picture, which is now making headlines, shows Musk in mirrored sunglasses with Shiba Inu dog flashing through the frame. The tech billionaire changed his display picture on Twitter soon after mentioning that his son was holding his “Doge like a champ” in a reply tweet: “Lil X is holding his Doge like a champ. Literally never said the word “sell” even once!”
Bitcoin and Beyond
In February 2020, Tesla announced that it had bought Bitcoin worth $1.5 billion and showed its intention to accept it as a payment for its products. However, he again raised concerns over the energy consumption on mining the largest cryptocurrency which dragged the value lower and prices halved, thanks to the Chinese crackdown on mining.
Was it Musk who drove the success of the crypto market with his playful tweeting followed by more serious involvement, or was his newfound interest in the industry caused by its intrinsically growing popularity and maturity? Answers to these questions can only be assumed by one, but cryptocurrency fever is contagious.
Musk’s real-life love interest Claire Boucher aka Grimes has lately got involved in the industry. She sold a digital art collection worth $6 million with the help of blockchain-based non-fungible tokens or NFTs.
Tesla would no longer be accepting Bitcoin as a payment method due to concerns about its energy consumption. This attracted a lot of criticism as many said that if Elon alone can decide the price of Bitcoin, then it is a failure as a currency.
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Disclaimer: Angel One Limited does not endorse investment and trade in cryptocurrencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.
