Elon Musk and Bitcoin - The Story So Far
Elon Musk, the South African-born billionaire owner of Tesla and SpaceX, has often maintained his purpose in life is to improve the prospects for humanity’s long-term survival. Whether his recent involvement in Bitcoin is part of that purpose or a distraction remains to be seen. However, what is certain, is that Elon Musk, the world’s second-richest man, has fully embraced the Bitcoin and cryptocurrency revolution.
The story of the two - Musk and Bitcoin, begins in November 2017 when in a blog post, Sahil Gupta, a former intern at Musk’s space company SpaceX, theorized that “Satoshi is probably Elon,” something which Musk denied, even saying he has lost bitcoin that his friend gave him a few years ago.
Fast forward to July 2020 and Elon Musk’s Twitter account was one of a few ‘Blue Tick’ accounts that were hacked, duping people into parting with over $120,000 worth of Bitcoin in the crypto scam. Later that month, in response to the hack, Musk tweeted “Excuse me, I only sell Doge!” - a tongue-in-cheek reference to Dogecoin, the cryptocurrency that started as a joke meme in 2013.
However, it was not until the end of 2020 and the start of 2021 that the Musk - Bitcoin story really develops. In December 2020, during a Twitter conversation with Michael Saylor, CEO of MicroStrategy Inc, Musk inquiries about converting “large transactions” of Tesla’s balance sheet into Bitcoin saying: “Are such large transactions even possible?” That month, Bitcoin rose 50%, closing 2020 with a 305% annual gain.
On January 29th, 2021, the former PayPal CEO added “#bitcoin” to his Twitter profile page. Within just a few minutes, the price of Bitcoin soared by 15%. Days later, on the Clubhouse social media app, Musk announces his support for Bitcoin, saying: “Bitcoin is a good thing.” He also said he should have bought the digital currency eight years ago, admitting he is “late to the party.”
Despite some early February tweets about Dogecoin, which saw its market cap hit nearly $10 billion, it is the revelation that Musk’s Tesla purchased $1.5 billion worth of Bitcoin that the Elon Musk - Bitcoin story steps up a notch. In a filing to the SEC, Tesla said it purchased the bitcoin for “more flexibility to further diversify and maximize returns on our cash.” The news of the Tesla investment sent Bitcoin soaring with prices jumping 20% almost immediately. Within just a week, Bitcoin’s price hit an all-time high of $55,923.70 with Tesla recording a paper profit of nearly $1 billion on its Bitcoin investment already.
A single tweet from Musk at the end of February saying Bitcoin ‘seems high’ sent BTC prices down an instant 8.2% with Tesla shares also falling 2%, altogether wiping more than $15 billion from Musk’s personal wealth in a single day.
The Elon Musk - Bitcoin story is far from over. Musk’s fortunes are now intertwined with Bitcoin’s. The world has seen the effect that a single tweet from Musk can have upon Bitcoin’s price and Elon Musk being Elon Musk, this Musk - Bitcoin story has a lot more twists left in it. Buckle up and keep a close eye on Elon Musk’s Twitter account for the next installment.
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