Tesla CEO Elon Musk Says Bitcoin Purchase is "Less Dumb" Than Holding Cash
Elon Musk tweets in defense of Tesla's $1.5 billion bitcoin purchase as Bitcoin price hits a new record.
This story originally appeared on ValueWalk
Tesla CEO Elon Musk is talking more about the automaker's bitcoin purchase. In response to a comment from Binance CEO Changpeng Zhao, he called Tesla"s $1.5 billion bitcoin purchase "adventurous enough for an S&P500 company."
Tesla CEO defends bitcoin purchase
Zhao told Bloomberg in an interview that he was surprised that Musk was "so gung-ho on Dogecoin." Binance is the biggest cryptocurrency exchange in the world by volume, and it recently launched Dogecoin futures. However, Zhao also pointed out that Tesla purchased $1.5 billion worth of bitcoin rather than Dogecoin.
In response, Musk tweeted that Tesla's bitcoin purchase "is not directly reflective" of his opinion. He also said owning bitcoin is "simply a less dumb form of liquidity than cash" and is "adventurous enough for an S&P 500 company."
The Tesla CEO also said that he isn't an investor and doesn't even own any publicly traded stock aside from Tesla. He added that "when fiat currency has negative real interest, only a fool wouldn't look elsewhere."
"Bitcoin is almost as bs as fiat money," Musk tweeted. "The key word is 'almost.'"
Bitcoin price hits a new record
Following Musk's tweet, the bitcoin price soared above $52,000 to a new record high. Bloomberg notes that the Tesla CEO's remarks highlight one of the markets' biggest problems right now. With governments pumping so much cash into the financial system due to the pandemic, investors are getting concerned about inflation and looking for other places to invest. This week alone, the bitcoin price is up by approximately 10%.
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest companies that are still managed by their founders. Although Musk said Tesla's bitcoin purchase doesn't reflect his opinion, it seems clear that he had something to do with it. The automaker probably wouldn't have bought the cryptocurrency if Musk hadn't become a believer in it recently.
Some speculated that Tesla's bitcoin purchase would lead other major companies to dive into the cryptocurrency, but Fortune reports that it isn't happening. Gartner Finance conducted a survey earlier this month asking chief financial officers if they plan to buy bitcoin this year. Ninety-five percent of respondents said they didn't intend to buy the cryptocurrency this year.