The Tesla CEO just made the comment on Twitter, weeks after his company bought over $ 1.5 billion worth of Bitcoin.
Bitcoin is better than paper money
Elon Musk says Bitcoin is a better alternative to store of value than fiat money. The Tesla CEO previously referred to Bitcoin as “BS like fiat”, but gave no explanation.
„Having some bitcoin, which is just a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company,“ Musk said in the tweet.
He also emphasizes that his opinion does not reflect that of Tesla as a whole.
The electric automaker made waves earlier this month after it announced it bought over $ 1.5 billion worth of Bitcoin . Tesla said it was looking for better returns in a low-return environment and general coverage against overinflation concerns around the world – and that is what Bitcoin offers.
Musk reiterated that point today, suggesting that it would be a sign of trouble for business people, corporations, and individuals around the world not to mind alternative investments as opposed to storing value in a fiat currency.
„If fiat currency has negative real interest rates, just a fool wouldn’t look elsewhere,“ Musk said.
However, he added:
“Bitcoin is almost as bad as fiat money. The key word is „almost“. “
That statement means that Bitcoin is not necessarily any different from the way fiat money works in the world – that is, a transfer medium that everyone has agreed on the value of. In that sense, Bitcoin is the same ideologically, but properties like privacy, security, and immutability make it a better form of money for some.
Companies wake up when it comes to new money
Musk’s comments came against the background of newer and existing companies and individuals who met their own comments and insights about how they view Bitcoin investing.
On Monday, enterprise software maker MicroStrategy announced that it would raise over $ 600 million in convertible bonds from institutional investors – with all of the proceeds going to be invested in Bitcoin. The company later increased that amount to over $ 900 million, due to far greater demand.
Then later that week came the comments from Microsoft founder Bill Gates. He said he was „not shorting“ Bitcoin, adding that it was a beneficial technology to bring money into „more digital form and reduce transaction costs“ (he was not referring to cryptocurrencies).
Yesterday Jeffrey Gundlach, the CEO and founder of the mutual fund firm DoubleLine, stated that while he is a long-time gold bull, he sees Bitcoin as more of a „stimulus asset“ compared to the yellow metal:
“A lot of liquid that is poured into a funnel creates a torrent. Bitcoin could be the stimulus asset. It doesn’t look like gold is that. “
So now there are some fools who buy bitcoins . The popular investment newsletter „The Motley Fool“ said this week that it would buy $ 5 million in assets in the coming days and said it was part of a larger, „10x“ portfolio.