Musk vs. The Fed: Will the 100 Billion USD Bet on Bitcoin Determine the Fate of the USD?

Cryptocurrency analysts are discussing the possibility of Elon Musk acquiring 100 billion dollars worth of Bitcoin. This follows a suggestion from Robert Leshner, the founder of Compound, who mentioned that Musk might consider such a move. Leshner framed his comments partly as a joke.

This idea relates to Musk’s recent statements about the fiscal policy of the United States. Musk criticized the U.S. House of Representatives tax bill that is estimated to increase the federal deficit over ten years. He described this government spending as “irresponsible.” Leshner suggested that Musk could counter this by acquiring Bitcoin, an action that could potentially reduce the position of the U.S. dollar. Bitcoin has a fixed maximum supply of 21 million coins. Approximately 19.87 million coins are currently in circulation. To acquire $100 billion, you would need to purchase over 5% of the total Bitcoin currently available. This scale of acquisition would remove a large amount of Bitcoin from exchanges. Such a reduction in available supply typically exerts pressure on sellers to demand higher prices. This pressure can cause the market price of Bitcoin to rise significantly. Besides the immediate price impacts, Musk’s move could change market perspectives. Tesla, Musk’s electric car company, currently holds Bitcoin. A much larger acquisition by Musk could encourage other corporations and individual investors to consider holding Bitcoin more actively. This could promote the use of Bitcoin as an asset held by companies. Cryptocurrency traders and analysts have shared their views: Adam Back, CEO of Blockstream, noted that Bitcoin aligns with Musk’s preferences. However, Back expressed skepticism that Musk would significantly add to Tesla’s Bitcoin position. He called it a “smart investment move” but observed that Musk tends to be cautious.

Samson Mow has used social media to urge Musk to commit fully to Bitcoin. Mow also suggested that Musk’s SpaceX company could offer a lower price for rocket launches paid for with Bitcoin. Elon Musk has not yet announced plans for the acquisition of Bitcoin in large quantities. However, Leshner’s initial comments have sparked conversation. If Musk makes a $100 billion acquisition, this could further impact confidence in the U.S. dollar, especially with current concerns about government deficits.