Billionaire entrepreneur and Tesla CEO Elon Musk praised Bitcoin (BTC) for its ability to protect investors from the effects of fiat currency printing, while analysts noted that fiat currency printing may increase due to the upcoming government-funded artificial intelligence development race.
Musk lauded the anti-inflation mechanism of Bitcoin's energy-based proof-of-work model, which is unaffected by government fiat currency printing because "you cannot counterfeit energy."
"This is why Bitcoin is energy-based: you can issue fake fiat currency, and every government in history has done this, but you cannot counterfeit energy," Musk wrote in a post on X on Tuesday.
Musk's comments were a response to a post by well-known analyst Zerohedge, who attributed the current momentum of Bitcoin and precious metals to the "devaluation" funding the government-funded AI arms race that will unfold between the world's largest economies.
"AI is the new global arms race, and capital expenditures will ultimately be funded by the government (the U.S. and China)," Zerohedge wrote in a post on X on Tuesday, linking the recent momentum of Bitcoin, gold, and silver to the "devaluation funding the AI arms race."
Tuesday's response marked Musk's first serious public post related to Bitcoin in nearly three years, since he predicted an impending crypto winter shortly after the collapse of FTX and Alameda in November 2022.
"BTC will survive, but it may be a long winter," Musk wrote in a post on X on November 14, 2022, when Bitcoin hit a low of $16,000 during the last bear market.
FTX collapsed due to the misappropriation of user funds, resulting in an $8.9 billion loss for investors. The crypto exchange filed for bankruptcy on November 11, 2022, and was seen as a major catalyst for the subsequent crypto winter.
Musk has not commented on the sustainability of the Bitcoin mining network, which he previously criticized for its excessive reliance on fossil fuels.
In May 2021, electric vehicle manufacturer Tesla suspended Bitcoin vehicle purchase payments due to environmental concerns, causing the price of Bitcoin to drop 6% in one hour, from $54,800 to about $51,600.
While Tesla has not sold most of its Bitcoin holdings, the company has not commented on the potential resumption of Bitcoin payments, which Musk previously promised would happen if the mining network's renewable energy usage increased.
On June 13, 2021, Musk stated that Tesla would allow BTC transactions once it could confirm that the Bitcoin mining network used at least 50% clean energy.
According to the chart modeled by climate tech venture capitalist Daniel Batten and Bitcoin analyst Willy Woo, the sustainable energy usage rate for Bitcoin mining has reached a historic high of over 55%.
Cointelegraph has contacted Tesla for comment.
Related: Will Bitcoin (BTC) rise to $1 million? Why Gemini's Winklevoss brothers call it "Gold 2.0"
Original article: “Musk praises Bitcoin (BTC) for being energy-based and anti-inflation, unlike 'fake fiat'”
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