‘I support crypto’: Elon Musk tweet helps Bitcoin’s price stabilize at $37,600 after he slammed it and sent it plummeting

  • Elon Musk was a cryptocurrency champion but earlier this month tanked the price by expressing concern about good it was for the environment 
  • Then on Saturday, Musk made a vague reference to crypto, Tweeting: ‘Any sufficiently advanced magic is indistinguishable from technology’ 
  • When someone asked him who he was angry at, Musk replied that the ‘true battle is between fiat & crypto. On balance, I support the latter’
  • The renewed support appeared to stabilize Bitcoin’s dramatic drop in value over the past seven days
  • It rose briefly to $38,150 before easing slightly to $37,600 late on Saturday night 
  • Musk said earlier this month that Bitcoin mining uses more energy than small countries do 
  • Tesla is no longer accepting cryptocurrency as payment for its vehicles  

Elon Musk appeared to show renewed support for cryptocurrencies on Saturday, and the so-called Dogefather’s boost may have helped stabilize a precipitous drop in Bitcoin’s value. 

In a Twitter thread posted early Saturday morning, the billionaire tech mogul said ‘any sufficiently advanced magic is indistinguishable from technology’.

His legion of followers interpreted it to be a reference to cryptocurrency, whose values have been on a steep decline since Musk Tweeted about the enormous environmental impact of mining them. 

When someone asked what the Tesla CEO thought about people ‘who are angry at you because of crypto,’ Musk tweeted that the ‘true battle is between fiat & crypto. On balance, I support the latter.’ 

A fiat currency is defined as being backed by the government that issued it, rather than something that is intrinsically valuable like gold. 

All the world’s major currencies, from the US dollar to the Japanese Yen, are fiat money.

After Musk’s post Bitcoin’s price rose slightly to $38,150 before easing to $37,600 late on Saturday night.

The price is still down more than 30% in May after a barrage of bad news.

Tesla has announced it will no longer accept the currency as payment, and Chinese officials said they would no longer accept it in their financial systems.  

Elon Musk, the billionaire founder of Tesla and outspoken crypt booster, has been tweeting his support of crypto over ‘fiat’ currencies

Elon Musk appeared to show renewed support for cryptocurrencies in a tweet Saturday, saying he supported it over ‘fiat’  currencies

Bitcoin’s value dropped as low as $32,000 earlier this week before recovering some of its losses 

In a Twitter thread on Thursday night, Musk argued that the cryptocurrency could be environmentally friendly in the future, so long as  the biggest ‘miners’ revealed how much renewable energy they used.  

‘This *can* be done over time, but recent extreme energy usage growth could not possibly have been done so fast with renewables. This question is easily resolved if the top 10 hashing orgs just post audited numbers of renewable energy vs not,’ he said.

He went on to say that Bitcoin mining was starting to use more energy than small countries.  

‘Bitcoin hashing (aka mining) energy usage is starting to exceed that of medium-sized countries.  

In a Twitter thread on Thursday night, Musk argued that the cryptocurrency could be environmentally friendly in the future, so long as the biggest ‘miners’ revealed how much renewable energy they used

‘Almost impossible for small hashers to succeed without those massive economies of scale.’ 

Bitcoin mining sees new ‘coins’ generated by extremely sophisticated computers solving complex mathematical problems. Although no physical mining is involved, and no actual coins are minted, the technology involved uses huge amounts of electricity, which in turn burns large quantities of fossil fuels.

In a report issued on Thursday, the Treasury described new compliance proposals from President Joe Biden, including mandatory tax reporting for transactions of $10,000 or more for Bitcoin and its rival cryptocurrencies.

Explaining the proposal, a Treasury Department spokesman said: ‘Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.

‘This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets.

Musk was a cryptocurrency champion but earlier this month tanked the price by expressing concern about good it was for the environment.

‘Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.’

The measure, set to take effect in 2023 if passed, would require businesses to report crypto transactions over the threshold to the IRS, as they are currently required to do with cash, in a bid to crack down on tax evasion and money laundering.

According to CNBC, financial analysts believe the Security and Exchange Commission – a financial regular separate to the Treasury Department – will likely be granted jurisdiction over cryptocurrency by Congress.

Bitcoin dropped 6 percent on the news to just under $40,000, a day after Wednesday’s turbulent trading that saw the coin whipsaw up and down 30 percent within hours, with support from Tesla CEO Elon Musk fueling the rebound.

Analysts believe that Thursday’s proposal could bolster the value of cryptocurrency long term, by granting Bitcoin, Ether and their rivals true legitimacy, as well as making transactions using the currencies safer.

Before Thursday’s IRS announcement, Bitcoin had earlier regained some lost ground to trade above $40,000 on Thursday morning.

The increase in value came a day after a brutal selloff on concerns over tighter regulation in China and unease over the extent of borrowing in the cryptocurrency world. 

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