Elon Musk Praises Bitcoin Amid Ongoing Downturn In Top Asset

Billionaire entrepreneur Elon Musk has praised Bitcoin as superior to fiat currency. Musk said this in a post on X, representing a rare praise of the flagship asset by the Tesla CEO.

The comments also follow a sharp decline in the value of Bitcoin due to the recent crypto market flash crash. BTC fell as low as $104,000 during the incident, although it has since seen some recovery.

Elon Musk’s Comment on Bitcoin is the First In Years

According to Musk, Bitcoin is superior to fiat currencies because it is based on energy. He claimed that energy, unlike cash, cannot be faked.

Elon Musk said:

“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.”

The Tesla CEO’s comment was in reaction to a post by the popular financial account on X, Zerohedge. In the post, Zerohedge stated that AI is now the new arms race. Also, world powers (the US and China) will eventually fund the capital expenditure for AI.

Zerohedge added that the recent surge in the demand for precious metals, such as gold, silver, and Bitcoin, is due to the debasement of fiat currencies to fund the AI race.

While many people agree with this view, Musk’s comment stands out. The billionaire has been silent on Bitcoin since at least 2022. This was around the time Tesla sold most of its Bitcoin holdings.

Tesla was one of the first major companies to own Bitcoin. They had purchased $1.5 Billion worth of the cryptocurrency in 2021. It even enabled Bitcoin payments for its cars, but later ended the policy.

Since then, Elon Musk has avoided making comments related to Bitcoin. He even avoided Bitcoin-related questions for Ark Invest CEO Cathie Wood in 2024.

Unsurprisingly, his latest comment has generated multiple reactions, including from Strategy chairman, Michael Saylor. Saylor, who is a famous Bitcoin bull, posted:

“The laws of nature are superior to the laws of man.”

Bitcoin Regresses to $112k After Minor Bounce

Meanwhile, Elon Musk’s comments had no impact on Bitcoin’s price performance, another sign that this is not 2021. The flagship asset has declined by almost 2% over the last 24 hours. At press time, it was trading around $112,000, after initially recovering to $115,000.

According to CoinMarketCap, the current price indicates that BTC is down by more than 7% over the past week. At the same time, it has dropped 6% over the past three months.

Analysts see no signs of recovery for the top coin yet. They note that investor conviction had weakened even before the recent capitulation. CryptoQuant analyst Crypto Avails noted short-term holders are still sending Bitcoin to exchanges, with some doing it at a loss.

So far, almost 29,000 BTC sent to the exchange has been in profit, while 20,700 BTC has been in loss. The analyst warned that if the trend continues, the market could see capitulation.

Short traders are anticipating a drop in BTC to the $110,000–$108,000 range. This expectation highlights the growing risk of capitulation.

CryptoQuant’s head of research, Julio Moreno, noted that short traders have already tried that three times. Conviction among bulls is also reducing, with the Crypto Fear and Greed Index now at 42. It is neutral but evokes a sense of fear.