Elon Musk

Will Elon Musk Dump Bitcoin?

Elon Musk

As Bitcoin’s prices spiraled down, Elon Musk, once Bitcoin’s most influential supporter, did not outright deny that his electric-car company Tesla has sold or could soon sell all of its Bitcoin holdings. 

Previously, the electric automaker has already discontinued Bitcoin as a form of payment due to concerns around its environmental impact.

In a response of a tweet, “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings,” Elon Musk tweeted: “Indeed.”

He may have implied that Tesla has sold, or plans to sell, its Bitcoin holding. 

Bitcoin’s prices dropped by $5,000 in the wake of the tweet. BTC is now trading at $44,622.51, down 7.3% over the previous 24 hours. Dogecoin (DOGE), the “joke” meme-based cryptocurrency supported by Musk, is trading at $0.493124, down 8.5%. 

Additionally, Musk rejected the claim that Bitcoin’s Proof-of-Work (PoW) consensus mechanism helps it stay decentralized. “Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies. A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound ‘decentralized’ to you?” Musk tweeted.

 

Elon Musk Working with Dogecoin Team 

On the other hand, Musk has proposed a radical Dogecoin upgrade that he claims is “needed [for dogecoin] to become the currency of Earth”—and will mean it beats Bitcoin “hands down.”

“Ideally, doge speeds up block time 10X, increases block size 10X and drops fee 100X. Then it wins hands down,” Musk said. 

According to one of the Dogecoin developers, Musk has been advising the development of the meme cryptocurrency since 2019. 

Dogecoin developer Ross Nicoll told Decrypt that since Musk started talking to the developers in 2019, he has “encouraged them to improve the higher transaction throughput,” and provided “lots of advice and input.” Musk has also offered funding for the project, but the developers declined.

Dogecoin is modelled on Bitcoin but uses a different code, Scrypt, which is less energy-intensive. This makes Dogecoin more in line with Musk’s environmental friendly stance on cryptocurrencies. It is possible to reduce Dogecoin’s energy consumption to make the coin greener, according to the Dogecoin developer.

Newsletter