The cryptocurrency analyst is discussing the possibility of Elon Musk purchasing $100 billion worth of Bitcoin. This follows a suggestion from Robert Leshner, the founder of Compound, who mentioned that Musk could consider such a move. Leshner framed his comments partly as a joke.
This idea relates to Musk's recent statements about U.S. fiscal policy. Musk criticized the U.S. House tax bill, which is estimated to increase the federal deficit over ten years. He described this government spending as "irresponsible." Leshner suggested Musk could counter this by buying Bitcoin, an action that could potentially diminish the U.S. dollar's position.
Bitcoin has a fixed maximum supply of 21 million coins. About 19.87 million coins are currently in circulation. To acquire $100 billion, you would need to buy more than 5% of the total Bitcoin currently available. This scale of purchase would remove a large amount of Bitcoin from exchanges. Such a reduction in available supply typically puts pressure on sellers to demand higher prices. This pressure could cause the market price of Bitcoin to surge.
Beyond the immediate price impacts, Musk executing this move could change market perceptions. Tesla, Musk's electric vehicle company, currently holds Bitcoin. A much larger purchase by Musk could encourage other corporations and individual investors to consider holding Bitcoin more actively. This could boost the use of Bitcoin as an asset held by companies.
Traders and cryptocurrency analysts have shared their views:
Adam Back, CEO of Blockstream, notes that Bitcoin aligns with Musk's interests. 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 fully commit to Bitcoin. Mow also suggested that Musk's SpaceX could offer lower prices for rocket launches paid for in Bitcoin. Elon Musk has yet to present plans for a large-scale Bitcoin buyback.
However, Leshner's initial comments have sparked the conversation. If Musk makes a $100 billion purchase, this could further impact confidence in the U.S. dollar, especially amid current concerns about government deficits.
