Cryptocurrencies edged higher on Wednesday after Elon Musk disclosed for the first time that his private rocket company SpaceX holds bitcoin and that Tesla would “most likely” resume accepting it as payment for its electric cars.
Musk outlined his cryptocurrency investments during a panel alongside Jack Dorsey, chief executive of Twitter and payments group Square, and Ark Invest chief executive of Cathie Wood at The B Word online conference hosted by the Crypto Council for Innovation.
Musk said he personally held bitcoin, ethereum and the more niche dogecoin, while two of his companies, SpaceX and Tesla, were bitcoin investors — and would remain that way.
“We’re not selling any bitcoin, nor am I selling anything personally,” he said. “I would like to see bitcoin succeed.”
Answering critics who accused him of encouraging and profiting from wild crypto price swings with bold statements on Twitter, where he has more than 58m followers, Musk reiterated his commitment to the digital token: “If the price of Bitcoin goes down, I lose money. I might pump, but I don’t dump,” he said.
Bitcoin rose more than 5 per cent to $31,600, while ethereum was up more than 7 per cent to $1,900.
Musk, Dorsey and Woods also touched on the challenges involved in scaling bitcoin, as well as its environmental impact.
Bitcoin and other digital coins enjoyed a dizzying rise from December through the beginning of this year, but much of those gains have been erased as regulators increase scrutiny of the freewheeling market.
In February, bitcoin soared after Musk revealed that Tesla had ploughed $1.5bn of its reserves into the cryptocurrency and said the company planned to accept payments in the digital currency for its electric cars.
However, he reversed course months later in May, citing environmental concerns about the mechanism used to validate bitcoin transactions, known as bitcoin mining.
Bitcoin critics have criticised the use of fossil fuels as sources of power for the energy-hungry currency. Musk on Wednesday recommended that hydroelectric, geothermal or nuclear energy be used and even proposed a futuristic “space heater” to mine cryptocurrencies in the future.
“It looks like bitcoin is shifting more towards renewable and it looks like a lot of the heavy duty coal plants that were being used have been shut down, especially in China,” Musk said, adding that he intended to confirm that at least 50 per cent of bitcoin mining energy usage was renewable.
“There is a trend towards increasing that number. If so, Tesla would resume accepting bitcoin,” he said.
Sporting a tie-dye T-shirt and long beard, Dorsey said his hope for bitcoin was “that it creates world peace”. Last week, he announced that Square would launch a platform for developers to create “decentralised finance” projects built on bitcoin, complex financial products denominated in cryptocurrency that cut out traditional middlemen.
Woods urged companies to add bitcoin to their balance sheets, arguing it would act as “a hedge against inflation”.
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