When thinking of the Elon Musk cryptocurrency debate, it really comes down to two coins: Dogecoin and Bitcoin.
Musk has long supported cryptocurrencies. In fact, there was a rumor going around in 2017 that Elon Musk might actually be Satoshi Nakamoto, the anonymous developer of Bitcoin. (Musk has denied this)
“Paper money is going away,” Musk said in a 2019 interview with Ark Invest. “And crypto is a far better way to transfer value than pieces of paper. That’s for sure.”
Musk is CEO of both Tesla and SpaceX, both of which have made investments into Bitcoin. Telsa purchased $1.5 billion worth of Bitcoin in February 2021. SpaceX also owns Bitcoin, although it’s unclear how much.
For a short time, Telsa was accepting Bitcoin as payment but then stopped after Musk suddenly realized how much coal-based energy was being used to mine Bitcoin. Musk says Tesla will start accepting Bitcoin again once at least half of its energy usage is powered by renewable sources such as wind and solar.
Some have accused Musk of “pump and dump” tactics: talking about Bitcoin to get the price high and then selling to make a quick profit. But Musk says that isn’t the case. At The B Word event in July 2021, he said “If the price of bitcoin goes down, I lose money. I might pump, but I don’t dump,” he said. “I definitely do not believe in getting the price high and selling, or anything like this. I would like to see Bitcoin succeed.”
Elon Musk, Cryptocurrency + Dogecoin
So Elon Musk has a long history of supporting bitcoin, but how did he get involved in Dogecoin – a cryptocurrency that started out as a joke?
The first time Elon Musk tweeted about Dogecoin was in April 2019. “Dogecoin rulz” he tweeted. And that same day, “Dogecoin might be my fav cryptocurrency. It’s pretty cool.”
He’s also called Dogecoin “the people’s crypto,” saying he saw people on the production line at Tesla and building rockets at SpaceX who owned Dogecoin, not just financial experts or Silicone Valley technologists.
But depending on who you are, you may or may not find this reason for liking Dogecoin compelling: “Doge has dogs & memes, whereas the others do not,” he tweeted in May 2021.
Musk says Dogecoin does have value beyond dogs and memes. He says Dogecoin is better suited for transactions than Bitcoin. “The transaction volume of Bitcoin is low and the cost per transaction is high,” Musk told TIME magazine in his interview for TIME’s 2021 Person of the Year. “Fundamentally, Bitcoin is not a good substitute for transactional currency.”
“Dogecoin is better suited for transactions,” Musk continued. “The total transaction flow that you can do with Dogecoin … like transactions per day … has much higher potential than Bitcoin. It is slightly inflationary. But that inflationary number is a fixed number as opposed to a percentage. So that means over time its percentage inflation actually decreases. And that’s actually good because it encourages people to spend rather than horde it as a store of value.”
On April 1, 2019, the official Dogecoin Twitter account posted a poll asking who should be the CEO of Dogecoin. Elon Musk won with 54% of the vote:
After that, Musk briefly changed his Twitter bio to “CEO of Dogecoin” then later “Former CEO of Dogecoin”.
When Elon Musk hosted Saturday Night Live in May 2021, he played a financial advisor on Weekend Update. “Call me the Dogefather,” he said when he was introduced. Michael Che asked multiple times “What is Dogecoin?” and Musk’s character kept providing multiple descriptions and explanations. Eventually Che asks, “Oh. So it’s a hustle?”
“Yeah, it’s a hustle,” responds Musk. As a result, Dogecoin fell nearly 30% during the episode.
This underscores both the volatility of cryptocurrencies like Dogecoin and Musk’s ability to move crypto markets based on what he says or tweets. In December 2021, Dogecoin jumped more than 20 percent after Musk tweeted Tesla will make some merchandise purchasable with Dogecoin.
“The point is that Dogecoin was invented as a joke, essentially to make fun of cryptocurrency,” he told TMZ in May 2021. “Fate loves irony. What would be the most ironic outcome? The currency that started as a joke in fact becomes the real currency. To the moon!”
Musk has also had some influence on the Shiba Inu cryptocurrency: when someone asked how much $SHIB he’s holding, Musk responded “None” and the value fell 20 percent.
Whether it’s Bitcoin or Dogecoin, Elon Musk has made it clear that he’s a cryptocurrency fanboy. And he’s backing crypto for the long haul, not as a way to make a quick buck. (like he needs more bucks)