Does Elon Musk Still Believe in Crypto?

Everyone in the crypto space remembers January of 2021 when Elon Musk announced that Tesla had purchased $1.5 billion worth of bitcoin. 

Does Elon Musk Still Believe in Crypto?

This was at a time when it was selling for around $32,000. He also announced that Tesla would accept the digital currency for their vehicles. This news ignited a massive runup in the price of BTC to a then all-time high of $64,000 just a few months later.

In the crypto space Jan of 2021, Elon Musk announced that Tesla had purchased $1.5 billion worth of bitcoin.

The entire crypto market followed behind. Ethereum shot up to $4,000 along with many other altcoins. 

During this time, I was watching many of the small-market-cap altcoins I had previously purchased skyrocket in value practically overnight. Dogecoin was one such example. It was trading for well under a penny before launching off into space, hitting an all-time high of almost $0.74 in a little over a month.

Dogecoin was trading under a penny before launching into space, hitting an all-time high of $0.74 in a little over a month.

Much of this was propelled by Elon Musk’s tweets supporting the project. In fact, Elon has long been a fan of the humorous cryptocurrency and has invested in it privately and publicly.
It was hard to look away from my phone during this period. 

We were in the “speculative mania” phase of the crypto bull market. And this was made even more extreme by low interest rates, “stimmy” checks, and the recent popularity of meme stocks such as Gamestop and AMC.
Everyone was trying to get rich. 

But there was an almost palpable sense of impending doom underlying this euphoric frenzy. It felt like the world was on the brink of collapse. None of this seemed sustainable.
And sure enough, the party ended as quickly as it began. 
On May 12th, 2021, Elon Musk announced that due to environmental concerns over the mining of Bitcoin, Tesla would no longer accept the cryptocurrency for payment. This news caused Bitcoin to sell off rapidly.
In a few weeks, Bitcoin dropped back down to $30,000. And again, the rest of the crypto market followed. Altcoins were crushed and memecoins utterly wrecked.
During the meltdown, Elon stated that he wouldn’t sell his personal holdings of Bitcoin, Ethereum, or Doge. And while a bit less emphatic about his company’s crypto holdings, Tesla did periodically stress its belief in digital assets. In its first quarter 2022 earnings report, Tesla stated:

“We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash.” 

By the second quarter, they had clearly changed their tune. 
A shareholder deck just released revealed that Tesla sold 75% of its Bitcoin holdings, worth $936 million, in the second quarter of 2022. 
This was likely a large reason for the selloff that occurred in early June. 
Elon blamed the recent COVID lockdowns in China as the reason Tesla needed to increase its cash position.

The truth is that it’s tough to hold through a bear market.

With the macro economic environment looking rougher by the day, investors are fleeing to the US Dollar as a safe haven.

And this recent downtrend in the crypto markets is not out of the ordinary. In fact, it follows previous Bitcoin cycles very closely. 

In Crypto Cycle I’ve outlined how to identify and profit from these trends. 

A new bull market is ahead of us. And I’m positioning myself and my readers to take advantage of the next “speculative mania” in the crypto space.

See how by checking out the service now.

Chris Curl

Chris Curl
Editor, Daily Profit Cycle