A somewhat common speculation amongst Bitcoin bears is that Elon Musk’s sudden support of Bitcoin is just a joke of some sort.
It is possible that Elon Musk is simply kidding about his support of Bitcoin. But we find that unlikely for a few reasons.
However, we will still ponder what the future of Bitcoin looks like if Elon Musk reveals that he was kidding about his support of Bitcoin.
The Problem With Elon Musk Kidding About Bitcoin
The biggest problem with Elon Musk kidding about Bitcoin is that Tesla, the company that Musk owns, invested $1.5 billion into Bitcoin.
That one fact alone indicates that Musk is at least somewhat serious about Bitcoin. He would not have convinced the Board of Directors of Tesla that a $1.5 billion was worthwhile if he was kidding.
We admit that Musk supporting Bitcoin before the Tesla announcement could have been a prank. But after the announcement it looked more like Musk was trying to hint to his followers that they should purchase Bitcoin because of the inevitable price increase.
With all that out of the way, the chances of Musk joking about his support of Bitcoin are near 0%. It’s just not likely.
Elon Musk Is Probably Joking About Dogecoin
While on the topic of Elon Musk’s views of cryptocurrency, we will say that it does appear he is joking about Dogecoin. He even admitted as much after the announcement that Tesla had purchased $1.5 billion of Bitcoin.
Why would Musk joke about Dogecoin?
Well, Musk does seem to like internet memes and cryptocurrency. And Dogecoin combines the two of those. It’s also an easy way to get people comfortable with the idea of cryptocurrency without scaring them off with Bitcoin’s price.
Another theory is that Musk is manipulating the price of Dogecoin for his benefit or the benefit of his friends.
Musk is the richest man in the world, so we’re not sure if he really needs to manipulate Dogecoin. But it’s not illegal for him to manipulate Dogecoin, which means it’s always a possibility.
What Would Happen If Musk Is Joking About Bitcoin?
We’ll use the most likely scenario. Musk simply tweets out that his support of Bitcoin was all a joke and he recommends fiat currency.
Again, we find that extremely improbable at this point, but we’ll entertain the idea.
The price of Bitcoin would plummet if this was the case. Of course, it would probably plummet to the price it was at before Musk publicly supported Bitcoin, which was about $37,000/bitcoin.
That would be a 30% loss, which is a lot. But Bitcoin will endure because it has endured much worse.
Not to mention that Bitcoin is receiving public support and investment from other companies like MicroStrategy and PayPal.
In other words, Musk joking about Bitcoin would be bad because he is such a high profile Bitcoin supporter. However, there are enough competitors out there that it wouldn’t be a problem in the long-term.
In fact, Musk would likely come around to publicly supporting Bitcoin at some point in the future if this scenario were to occur. At that point, the price would increase with his public support.
Will Tesla Buy More Bitcoin Or Will Tesla Sell It?
This is a great question. Tesla claimed they purchased the Bitcoin because they planned on accepting Bitcoin as payment.
This does not make sense because one does not have to give Bitcoin as change when receiving it as payment. Tesla could simply receive the Bitcoin and sell it for fiat currency.
There is no reason for them to hold $1.5 billion worth of Bitcoin.
It appears that Tesla purchased the Bitcoin for the same reason MicroStrategy purchased Bitcoin. Tesla is gambling on the fact that Bitcoin will rise in price, which will look great on their books and will keep shareholders happy.
In fact, that is the only real explanation for Tesla purchasing Bitcoin. With that information, we can assume that Tesla will eventually sell the Bitcoin at some point to make their investors happy.
Investors would not be happy if Bitcoin drops in price to $3,000 after Musk purchased it in the $40,000s.
This also has led many to believe that Musk will lobby other tech CEOs to purchase Bitcoin. Why?
If other tech companies purchase Bitcoin, then the price will rise. That would obviously be great for Tesla.
It’s similar to what Michael Saylor is doing with MicroStrategy. MicroStrategy purchased Bitcoin in October and now Saylor is encouraging everyone, including CEOs, to add Bitcoin to their balance sheet.
He has a clear incentive to do that because all that demand and publicity will increase the price of Bitcoin, which would make MicroStrategy’s books look great.
There is not much more to cover about Elon Musk kidding about Bitcoin. It’s apparent that he’s either not kidding about Bitcoin or it’s a $1.5 billion dollar prank on the world.
We find the former much more likely than the latter. In the event that it is the world’s most expensive prank, then the price would likely drop by about 30% and then rise again.
Remember, Musk is the most high profile supporter of Bitcoin, but he is not the only supporter of the cryptocurrency. Other companies would likely see the price drop as a perfect opportunity to purchase some Bitcoin.