Billionaire entrepreneur and Tesla CEO Elon Musk praised Bitcoin’s capability to shield investors from the inflation caused by fiat currency printing, especially amid what analysts describe as an impending government-funded competition to advance artificial intelligence.
Musk lauded Bitcoin’s (BTC) energy-based proof-of-work model for being immune to inflation, as it is “impossible to fake energy,” making it resilient against governmental fiat currency debasement.
“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 stated in a Tuesday X post.
Musk’s remarks were a response to popular analyst Zerohedge’s commentary, which linked the current momentum of Bitcoin and precious metals to a potential “debasement” necessary to support a government-funded 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, connecting the recent rise of Bitcoin, gold, and silver 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” after FTX collapse
Tuesday’s response marked Musk’s first significant public statement regarding Bitcoin in nearly three years, following his prediction of an impending crypto winter shortly after the collapse of FTX and Alameda Exchange in November 2022.
“BTC will make it, but might be a long winter,” Musk expressed in an X post on Nov. 14, 2022, as Bitcoin faced a dip to its previous bear market low of $16,000.
The collapse of FTX stemmed from the mishandling of user funds, leading to an $8.9 billion loss for investors. The crypto exchange declared bankruptcy on Nov. 11, 2022, and was deemed a key factor in the subsequent crypto winter.
Related: DeFi booming as $11B Bitcoin whale stirs ‘Uptober’ hopes: Finance Redefined
Musk has not yet commented on the Bitcoin mining network’s sustainability, which he previously criticized for its dependence on fossil fuels.
In May 2021, Tesla halted Bitcoin payments for vehicle sales due to environmental concerns, resulting in a 6% drop in Bitcoin’s price within an hour, from $54,800 to around $51,600.
While Tesla has retained most of its Bitcoin holdings, the company has not made any announcements regarding the potential resumption of Bitcoin payments. Musk had previously stated he would support this if the mining network’s renewable energy usage increased.
On June 13, 2021, Musk mentioned that Tesla would accept BTC transactions once it could confirm that at least 50% of the Bitcoin mining network used clean energy.
Bitcoin mining’s utilization of sustainable energy has reportedly reached an all-time high of over 55%, according to data modeled by climate tech venture capitalist Daniel Batten and Bitcoin analyst Willy Woo.
Cointelegraph has reached out to Tesla for additional comments.
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