Elon Musk was born in South Africa and later immigrated to America, where he is currently an entrepreneur and businessman, renowned for founding the X.com company in 1999, currently known as Paypal. He also founded SpaceX and Tesla motors in 2003. In his late 20’s, Musk became a millionaire, when he sold his start-up company, Zip2, to a division of Compaq Computers.
In 2012, Musk made headlines pioneering the SpaceX project which launched a rocket the first commercial vehicle to the International Space Station. He then became an industry leader when he accepted the role of advisor to the current President of the United States, Donald Trump in his early presidency.
Much recently, Musk featured in the headlines again, but this time for his alleged endorsement and investment of Bitcoin. We decided to check whether these rumours are based on facts or sensationalism.
What is Bitcoin?
Bitcoin refers to a virtual or digital currency. Basically, it is a type of money that lives online. Bitcoin can be used to buy products and services, but there are not many retailers who accept Bitcoin, although this is gradually changing as more and more countries are accepting the virtual currency. Bitcoin is also a decentralized currency, which means that it is not governed by any central authority, bank or government. Bitcoin cannot be printed or withdrawn from any bank. The currency lives online and is powered by the private codes printed inside them.
How Does Bitcoin Work?
Bitcoin is basically a computer file that is stored in a digital wallet. This digital wallet is accessible on a smartphone and computer file. Bitcoin can be sent to your digital wallet and you can send Bitcoin to other people. Every single Bitcoin transaction is recorded in a public list called the blockchain. This makes it impossible to spend Bitcoin that you do not own or duplicate transactions.
Has Elon Musk Invested in Bitcoin?
It is no secret that Elon Musk is a big fan of innovative technology and is usually ahead of the curve when it comes to finance. However, Musk has claimed that he does not have huge investments in the Bitcoin virtual currency or any other Bitcoin systems. After a long cryptic tweet series on SpaceX, BTC, and Tesla, Elon Musk shared his opinion on Bitcoin in a podcast that aired in January 2020. He noted that there is merit to cryptocurrency, but there are obvious concerns, including that cryptocurrency is still considered to be illegal in some countries and the price of cryptocurrency is erratic. Musk did not directly endorse Bitcoin or cryptocurrency in his podcast or his tweets. However, this is what Musk revealed in one of his tweets;
“I literally own zero cryptocurrency, apart from .25 BTC that a friend sent me many years ago,”. Musk has not used these BTC or invested in any more.
There have also been rumors that Elon Musk is Satoshi Nakamoto, the pseudonym used by the founders of Bitcoin. We can safely say that this is merely speculation. Musk has denied these rumors. Satoshi Nakamoto has never revealed their true identity and it seems that they don’t have any plans to do so in the near future.
Does Elon Musk’s Concerns Around Bitcoin Have Any Merit?
Musk is not the first billionaire to have concerns about cryptocurrency. Many other billionaires have shared similar concerns, including Charlie Munger, the second-in-command at Berkshire Hathaway. Charlie Munger has claimed that Bitcoin is a “noxious poison”. Warren Buffet has also been highly speculative of cryptocurrency. However, there have also been numerous success stories around cryptocurrency, particularly Bitcoin. In fact, there are celebrities who have openly endorsed Bitcoin and cryptocurrency, including Ashton Kutcher, Snoop Dogg, Gwyneth Paltrow and Paris Hilton among others.
Should an Investor Proceed Cautiously When Investing in Bitcoin?
There are still many curious potential Bitcoin investors, eager to enter the cryptocurrency market and start making the millions, as many have claimed overnight successes. It is, however, important to have a strategy or game plan before investing. Any investment is always a risk and the cryptocurrency market is particularly volatile. Having a game plan in place will protect you against huge losses.
Bitcoin has grown in popularity since it was launched in 2009. Multiple studies have been conducted and have proved that millennials and younger investors, in particular, have grown increasingly critical of traditional financial service providers and banks in the wake of the 2008 recession. According to reports, at least 40% of these millennials have indicated that they intend to invest in cryptocurrency in the future.
Although it may be easier for new investors to purchase digital assets right now, there are still a few crucial factors investors should consider before buying into the cryptocurrency market.