Elon Musk and his delicate relationship with cryptocurrencies

Elon Musk, CEO of Tesla and executive chairman of X (formerly Twitter), has always had a controversial relationship with the world of cryptocurrencies, with various ups and downs.

In this article, we review some of the key moves that Musk has made in the cryptocurrency industry from 2021 until today, focusing on the effects produced by his actions.

To underline in particular how the news of the last few days could have a strong impact on the way the billionaire will approach cryptocurrencies with his various companies, which according to him will never launch their own digital currency.

Let’s see all the details below.

What does Elon Musk have to do with cryptocurrencies: Tesla, Bitcoin, and Dogecoin

In recent years, Elon Musk, renowned entrepreneur and CEO of Tesla and SpaceX, as well as Executive Chairman of X, has played an extraordinary role in shaping the cryptocurrency landscape through his online presence and controversial tweets.

From 2021 onwards, thanks to its visibility on social media and the notoriety achieved with its ventures, it has managed to influence more or less visibly the performance of various assets in the cryptocurrency market such as Bitcoin and Dogecoin.

For this very reason, he has been accused multiple times of financial manipulation and insider trading, risking having to pay hundreds of millions of dollars in fines.

His ability to move the market with a single tweet highlights the growing intersection between the world of traditional finance and that of cryptocurrencies, where online statements can have tangible impacts on the digital wallets of millions of people.

One of the most significant episodes of this relationship with the crypto markets dates back to March 2021, when the magnate announced to the whole world that he would accept Bitcoin payments for the purchase of electric vehicles Tesla.

The news ended up causing a strong increase in the price of the cryptocurrency until two months later, Musk reversed his decision and stopped accepting the currency as a means of payment within his automotive company, citing environmental concerns related to the energy consumption of the mining practice.

This single announcement has caused an immediate price correction and raised questions about the stability of cryptocurrency decisions driven by Musk’s tweets.

Beyond Bitcoin, the Tesla CEO has repeatedly expressed a particular interest in Dogecoin, a cryptocurrency that was created as an internet joke in 2013 during the crypto craze.

Very often his doge-themed tweets have had a significant impact on its price performance, causing sudden strong rallies, but also heavy declines.

There have been many occasions in which Elon Musk has expressed his admiration for Dogecoin, even going so far as to temporarily replace the logo of the Twitter bird with that of the crypto that references a popular meme of the Shiba Inu dog Kabosu.

His incessant sympathy for crypto has led many to speculate that he would have added it as a payment currency for the platform’s advertisements, but that was not the case.

In August of last year, he even declared in a public space on X that his platform represents a “friendly place” for Dogecoin.

The latest news from Musk’s house: after the approval of the first spot ETF, Bitcoin could be integrated into X

On January 10, 2024, on the eve of the debut of the Bitcoin spot ETF in the US financial markets, Elon Musk participated in a space on X hosted by Cathie Wood, owner of the investment fund ARK Invest.

On that occasion, while Wood was talking about the implications related to the launch of his publicly traded fund “ARK 21Shares Bitcoin ETF” (ARKB), Tesla’s boss took the floor to discuss Bitcoin more generally.

On December 21st, he himself declared in another X space that he was no longer interested in cryptocurrencies and that lately he was not spending much time thinking about that sector.

One month earlier, in November, he had even publicly stated that none of his companies would EVER issue a cryptocurrency.

All his interest that had motivated the publication of several tweets in previous years regarding Bitcoin and Dogecoin seemed completely gone.

Four days ago, however, Musk surprised all space listeners by saying that although he is not spending much time thinking about Bitcoin, he is open to the idea of using the currency in some way on X.

It is not yet clear what role the billionaire is considering for the cryptocurrency, but many speculate that it is connected to the intention of launching P2P payments on social media.

Indeed, in 2024, the former Twitter platform is expected to launch new services related to the financial world, with a focus on payments and money transfers in a manner similar to PayPal (founded by him years earlier).

Who knows if Bitcoin will really come back into Musk’s thoughts and if it will be adopted as a currency for money exchanges on X.

Certainly, the needs of such a platform do not harmoniously fit with the characteristics of BTC, which is still slow and costly to exchange. 

Instead of being used as a payment currency, cryptocurrency is actually conceived by the majority of the crypto community as a store of value.

Are we about to see Elon Musk push the bull run of Bitcoin by adopting the currency within one of his companies? Will he backtrack again this time?

Will there be a noticeable effect on the BTC or DOGE price front?

Unfortunately, we still cannot know all this: the only thing to do is to stay focused and enjoy the show.