Elon Musk, the Tesla billionaire who fell out with U.S. president Donald Trump over his $37 trillion debt-raising tax and spend bill, has once again quietly signaled his support of bitcoin—even as a serious bitcoin price warning light flashes red.
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Bitcoin has swung wildly this week as the gold price soars and stock markets plunge on fears Trump could reignite the smoldering U.S. trade war with China, with a bitcoin price “flash crash” over the weekend sparking a serious BlackRock warning.
Now, Musk, who has said his new political party would support bitcoin over the U.S. dollar, has praised bitcoin for being “based on energy” and agreed the bitcoin price has soared amid dollar “debasement” designed “to fund the AI arms race.”
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Tesla billionaire Elon Musk has signaled his support for bitcoin amid wild bitcoin price and crypto market swings.
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“AI is the new global arms race, and capex will eventually be funded by governments (U.S. and China). If you want to know why gold/silver/bitcoin is soaring, it’s the “debasement” to fund the AI arms race,” the ZeroHedge X account posted, adding: “But you can’t print energy.”
Musk responded, saying: “True,” and adding: “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, who has said he personally holds bitcoin, ethereum and the meme-based dogecoin, also agreed with a reply to his post that said, “dogecoin is also based on energy.”
Bitcoin, which is secured by a network of so-called miners who use powerful computers to validate transactions in return for newly issued bitcoin, uses as much electricity each year as some small countries, with its energy demands climbing along with its price as more miners join the network.
Musk, who helped Trump back into the White House with campaign rallies and warnings over the spiraling U.S. debt pile that passed $37 trillion this year, dramatically fell out with Trump after he failed to rein in government spending, while Musk’s own department of government efficiency (Doge) initiative has so far failed to make the multi-trillion dollar savings it originally promised.
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The bitcoin price has rocketed higher this year, helped by Elon Musk’s continued support for bitcoin and warnings over the future of the U.S. dollar.
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Musk’s support for bitcoin and crypto has waned from its Covid-era peak, though Musk has continued to give backing to bitcoin, as well as his “favorite” cryptocurrency dogecoin.
Following his White House exit, Musk said his America Party would favor bitcoin over the U.S. dollar, with Musk branding the dollar and other non-asset backed currencies as “trash.”
Disquiet over so-called fiat currencies has grow in the years following the huge 2008 financial crisis bailouts that directly led to the creation of bitcoin and then Covid lockdown stimulus measures that flooded the economy with trillions of freshly printed dollars.
Government stimulus and supply chain-distrupting lockdowns sparked massive global inflation, which some fear has put the U.S. dollar into “death spiral” as the Federal Reserve is forced to create more dollars to pay off interest on its existing debt.