A Closer Look at Musk’s Hold on Cryptocurrencies
Let’s rewind back to 2018 when there was a revelation of Elon Musk’s Bitcoin assets. “I literally own zero cryptocurrencies, apart from .25 BTC that a friend sent me many years ago,” said Musk on Bitcoin.
We know now that in 2021, that’s far from true. It feels like Elon Musk has always had an influential grip on cryptocurrency. In 2021, he was one of the first eminent people to espouse cryptocurrencies. Though Dogecoin remains his favorite, Bitcoin is not far behind.
Musk became the talk of the town again this February when his company Tesla bought $1.5 billion in Bitcoin. He did have to face a lot of backlash coming his way, stating that on the one hand, while he was going green with Tesla, together he was investing in Bitcoin and wasting energy.
Elon Musk, CEO of Tesla and SpaceX, has primarily influenced the investors’ thoughts that center around Elon Musk bitcoin and its price. One cannot speculate about the quantity of BTC the billionaire owns. We all are well aware of the $1.5 billion investment that Tesla made in Bitcoin. And that’s the only concrete association we can make with Elon Musk. Tesla and Bitcoin have become synonymous since then.
But how much Bitcoin does Musk really own? Since, apart from Tesla’s, the value of Musk’s other Bitcoin holdings is unknown, let’s look at all the bits of information we’ve been able to collect across the internet — from friends and news outlets to even hints from Musk himself.
The Scaramucci Claim
Firstly, some reports suggest that Elon Musk’s bitcoin portfolio is a lot more, around $5 billion.
A hint was given by former White House Communications Director and global hedge fund SkyBridge Capital’s founder Anthony Scaramucci. In March this year, Scaramucci, in his tweet supporting investments of Musk on Bitcoin as concerns about Bitcoin mining’s impact on the environment loomed, said Elon Musk owns over $5 billion in Bitcoin via Tesla, SpaceX, and personally. Moreover, he went on to say that no living person has done more to protect the planet against climate change.
Tesla and Bitcoin
Tesla had over $19 billion in cash and its equivalents on hand at the end of 2020, according to its filing. The news that Tesla had bought about $1.5 billion, roughly Rs. 11,200 crores of Bitcoin in January, and expects to start accepting it as payment in the future, caused BTC price surge by 17% to $44,220 within a day.
It came days after Musk added “#bitcoin” to his Twitter profile, which pushed up the price, also sending out a cryptic tweet, saying, “In retrospect, it was inevitable.” Musk took it off days later but hasn’t ceased talking about Bitcoin and other cryptocurrencies.
Musk’s Hold on cryptocurrencies
It is no surprise that Elon Musk has a significant influence on cryptocurrencies to such an extent that he is even partly blamed for Bitcoin’s extant slump at many times. Only in February, Musk’s series of tweets hailing Dogecoin made its value soar high. Then again, in March, the Bitcoin value rose to a record-breaking high of $60,000 (approximately Rs. 45 lakhs) after he declared that Tesla would now accept BTC as a mode of payment. Two months later, in May, Bitcoin’s price came crashing down when Musk announced that Tesla will no longer accept Bitcoin payments due to growing environmental concerns.
Not long ago, in April, Elon Musk announced that Tesla had sold 10 percent of its Bitcoin holdings to demonstrate the cryptocurrency’s liquidity on the balance sheet while he has maintained his Bitcoin investment. The Tesla and SpaceX CEO said this as a response to a tweet by Barstool Sports founder Dave Portnoy, who challenged Musk’s sale of bitcoins and said that he had bought and sold the cryptocurrency at a higher price, making profits. Portnoy’s tweet came right after Tesla stated in its first-quarter earnings report that it had sold $272 million (roughly Rs. 2,030 crores) worth its Bitcoin holdings.
Certainly, Bitcoin price is also influenced by other factors such as geopolitical events and tweets and announcements from other prominent personalities. However, Musk’s influence over Bitcoin’s price action and over cryptocurrencies, in general, is much higher and undeniable.
Despite Musk’s influence over cryptocurrencies, of late, the value of both BTC and Dogecoin has sunk. Dogecoin’s crash began on April 21, a day after fans of the cryptocurrency celebrated Doge Day.
What Does Musk Think About The Future of Bitcoin?
A report says that every $1 billion invested in Bitcoin is equivalent to the carbon footprint of 1.2 million cars in a year. At the same time, another paper says that one Bitcoin transaction’s CO2 footprint is equal to 795,752 VISA transactions and could power an entire house for 25 days.
Contrary to popular belief, the holdings of Elon Musk on cryptocurrency don’t add to our carbon footprint. Instead, they give birth to an opportunity to go green shortly, says Musk as he works with North American miners to have them migrate to renewable sources of energy. It’s time we understand that the future of Bitcoin mining lies in utilizing renewable energy resources. We need not worry about the negative environmental impact of Bitcoin as it will eventually be solved.