- Elon Musk has gone from being labeled the king of crypto to the office bore
- His incessant tweeting about Bitcoin and Dogecoin has repeatedly spiked and then crashed the markets
- What are the reasons behind Musk’s fascination with cryptocurrency?
The name Elon Musk is now synonymous with Bitcoin and Dogecoin. The Tesla founder has gone from being labeled the crypto king to the court jester, albeit without any loss of power. His volte-face from Bitcoin lover to Bitcoin skeptic has taken many by surprise, while his incessant references to Dogecoin are now becoming wearisome, like that guy at the office who won’t stop going on about Battlestar Galactica no matter how many times you explain you have no intention of watching it.
But what has caused Musk to gatecrash the crypto party, flood the place with whisky, then set it on fire? We look at the possible reasons behind his treatment of the crypto space.
Musk is one of the richest men in the world. Billionaires like to play with bigger toys than us mere mortals, and for Musk the cryptocurrency market could be his plaything. After all it’s easier to manipulate the cryptocurrency market than the stock market (at least after his tweets about taking Tesla private in 2018), and he is well aware of the power of his tweets on the market. So maybe where you play Candy Crush on the toilet, Elon crushes people’s portfolios.
Musk revealed on his appearance on Saturday Night Live last week that he suffers from Asperger’s syndrome, although to anyone with a passing knowledge of the autism spectrum it was clear that he was on there somewhere.
On the show Musk admitted that “I sometimes say or post strange things”, to which those in the cryptocurrency community can attest, but that’s “just how my brain works”. Since first referencing Dogecoin Musk has repeatedly flipped from calling it things like the “future global currency” to a “hustle”, causing wild price fluctuations. It may well be that Musk’s Asperger’s is the reason why he can’t resist posting about Dogecoin and Bitcoin.
Tesla’s Future Plans
It didn’t take amateur analysts long to pull apart Musk’s sudden about-turn regarding Bitcoin. It didn’t seem viable that Tesla had spent $1.5 billion on bitcoin without knowing how it worked, so what else was at play? The reason could be to do with how Tesla gets its money.
As one Twitter user pointed out, Tesla earns more from Renewable Energy Credits (RECs) than it does making cars, and a major buyer of Tesla’s RECs announced that it won’t need to buy them from Tesla anymore. This leaves Tesla with a potentially big hole to fill, which is why it is has filed an application with the Environment Protection Agency for a project related to clean power generation and carbon credits.
Knowing that Bitcoin is not looked on favorably by environment regulators, Tesla may have decided it needed to be seen to distance itself from Bitcoin (while making sure it benefits from any price increases) which it has successfully done. Given that its environmental impact was the sole reason cited by Musk in Tesla’s decision to stop accepting bitcoin, this could well be the reason behind the latest move, and begs the question why this wasn’t considered when Bitcoin first came up as an option.
The Fly at the Picnic
When Musk was hyping Bitcoin and Dogecoin earlier this year, many were falling over themselves to praise his name like he was the savior of crypto. Few realized that his fickle nature had the potential to crash the market he had just inflated, except us – we warned about the dark side of such price manipulation but no one wanted to know because the euphoria was too strong.
Now the dark side of such heavy price manipulation, whatever the reason, has made itself known, and Musk has gone from being the honored guest at the picnic to being a huge fly that can tip over the table whenever it wants.