Billionaire entrepreneur and Tesla CEO Elon Musk praised Bitcoin for its capacity to shield investors from the effects of fiat currency printing, which may rise due to analysts predicting a government-led race in artificial intelligence development.
Musk commended Bitcoin’s (BTC) energy-based proof-of-work system for its resistance to inflation, asserting that it cannot be faked, unlike government-issued fiat currencies. “That is why Bitcoin is based on energy: you can issue fake fiat currency, and every government in history has done so, but it is impossible to fake energy,” Musk noted in a Tuesday X post.
His remarks were a response to an analysis by Zerohedge, which linked the current Bitcoin and precious metals momentum to a “debasement” fueled by the government-assisted AI arms race among major global economies.
“AI is the new global arms race, and capex will eventually be funded by governments (US and China),” Zerohedge wrote in a Tuesday X post, crediting Bitcoin, gold, and silver’s recent upsurge to the “debasement to fund the AI arms race.”
Related: $19B crypto market crash was ‘controlled deleveraging,’ not cascade: Analyst
Musk predicted Bitcoin’s “long winter” post-FTX collapse
Tuesday’s announcement marked Musk’s return to Bitcoin discourse for the first time in nearly three years, following his prediction of an impending crypto winter in November 2022 after the FTX and Alameda Exchange downfall.
“BTC will make it, but might be a long winter,” Musk stated in a November 14, 2022 X post, reflecting on Bitcoin’s drop to $16,000, its lowest value in the previous bear market.
FTX’s failure resulted from misuse of user funds, leading to an $8.9 billion loss for investors. The exchange filed for bankruptcy on November 11, 2022, considered a primary factor in triggering the subsequent crypto winter.
Related: DeFi booming as $11B Bitcoin whale stirs ‘Uptober’ hopes: Finance Redefined
Musk has not yet addressed concerns regarding the sustainability of Bitcoin mining, which he had previously criticized for reliance on fossil fuels.
In May 2021, Tesla halted Bitcoin payments for vehicle purchases due to environmental worries, causing a sharp decrease in Bitcoin’s price from $54,800 to about $51,600 within an hour.
Although Tesla has not sold off most of its Bitcoin assets, the company has remained silent on the potential resumption of Bitcoin payments, a promise Musk made contingent on increased renewable energy usage in Bitcoin mining.
On June 13, 2021, Musk asserted that Tesla would accept BTC transactions once it confirms that Bitcoin mining employs at least 50% clean energy.
Current data indicates that Bitcoin mining’s sustainable energy usage has surged to an all-time high of over 55%, as illustrated by the graph created by climate tech venture capitalist Daniel Batten and Bitcoin analyst Willy Woo.
Cointelegraph has reached out to Tesla for a statement.
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