After tweeting repeatedly for some time about bitcoin and the originally satirical degecoin, both of which have gone up massively in the past year, on Feb. 8 Elon Musk put his money where his mouth had been and had his Tesla EV company buy about $1.5 billion in bitcoin. The immediate aftermath of this was a substantial surge of the crypto from somewhat over $40,000 to somewhat over $50,000. This seems to have inspired several other major established corporations and entities to also announce they would be holding bitcoin as part of the asset portfolios, along with renewed discussions of more official cryptocurrencies possibly being issued by various central banks (commercial banks have for some years used XRP for transactions amongst themselves, but somehow it has not increased nearly as much as bitcoin or some of the other top cryptocurrencies for reasons I do not understand).
Anyway, it may be that instead of being a brilliant move that establishes the legitimacy and long term value of bitcoin once and for all, despite the massive amounts of electricity used in the mining of it, way more than for other leading cryptocurrencies, it is not out of the question that this may prove to have been its peak. Bitcoin has been noticeably sliding in recent days, although it is still just above $50,000, which might prove to be a new floor, given all the corporate backers it seems to have picked up.
However, even if bitcoin does not collapse, Musk appears to have damaged his portfolio in the near term rather badly with this move. After Tesla stock rose 700% last year, putting Musk ahead of Jeff Bezos as the world’s wealthiest individual bordering on $200 billion, Tesla stock has fallen 22% since Musk made his bitcoin move. This has cost him about $30 billion, more than wiping out the $ 1 billion or so he reportedly made directly from his bitcoin deal. Maybe bitcoin is not a bubble about to crash, but it does seem that Tesla’s stock got way overdone, and now people are tying the value of its stock to the volatile movements of bitcoin. Musk may yet come out of all this a way big winner, but as of now, he is taking a pretty big hit.