Musk, Dorsey On Bitcoin: Currency Of The Future … Or ‘Pump’

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Same tout, different day, different crypto.

In the recent volatility that has been a hallmark of bitcoin and, well, all cryptocurrencies, Elon Musk still has the power to move the prices of these digital offerings up and down.

It’s been bitcoin or Dogecoin that’s grabbed the headlines – and now, on Wednesday (July 21), it was Ethereum’s turn.

At The B-Word conference on Wednesday, Elon Musk said during a panel that he owns that particular cryptocurrency, which in turn helped the price surge more than 10 percent, above $2,000.

And in reference to that perennial favorite, bitcoin, Musk noted that Tesla would at some point start accepting the marquee name for crypto as payment again. As has been widely reported, the company stopped taking bitcoin as payment back in May, due in part to the environmental concerns tied to the production of the crypto itself. That shift comes as crypto production is embracing renewable energy sources, Musk said.

That sentiment echoes a view expressed in this space last month, when Stephen Pair, CEO of BitPay, told Karen Webster that bitcoin-related activity will drive renewable energy simply because it requires energy to process. We contend that it may be a bit of a virtuous cycle in that respect.

And as PYMNTS’ own research has shown, there’s an increasing awareness of, and desire to use, crypto in everyday commerce.  PYMNTS found that 18 percent of the adult population is likely to use cryptocurrency to make a purchase, which translates into some 46 million consumers.

Yet … back to the volatility. At the same conference this week, Musk said, “I might pump, but I don’t dump.”

Beyond the ‘Pump’

There’s an important factor to consider here: the fact that bitcoin is now trading near $32,000, when it had been below $30,000 not all that long ago — before Musk’s admission that he pumps, and that he still favors bitcoin.

It’s that excitement over the fact that others are excited – like a Musk or a Dorsey — over where bitcoin or its peers might be headed.

Jack Dorsey – well, for his part in the same conversation, he likened bitcoin to the internet’s “chance” for a “native currency” that has resilience baked in. The community surrounding the bitcoin universe, he said, remains “deeply principled” and (perhaps he was being a bit tongue-in-cheek) “weird as hell … it’s always evolving, and it just reminded me of the early days of the internet when I was a kid.”  

Upon seeing bitcoin in 2009, he said, “you see a chance to replace the whole foundation.” Specifically, he said that ACH and credit card networks were built in a different time period. “They have scaled … but they are not relevant to today, and they are certainly not relevant to the future.” Bitcoin, he added later in the discussion, “reminds me of the early internet.”

But some of the attributes that are touted, including anonymity, are under the microscope. Consider the fact that just this week, legislation was introduced in the European Union that would require cryptocurrency exchanges to gather more information from users.

In that legislation, it’s stated that “money laundering and terrorism financing pose a serious threat to the integrity of the EU economy and financial system and the security of its citizens. Europol has estimated that around 1 percent of the EU’s annual gross domestic product is ‘detected as being involved in suspect financial activity.’”

The proposal continued that “until now, transfers of virtual assets have remained outside of the scope of Union legislation on financial services, exposing holders of crypto-assets to money laundering and financing of terrorism risks, as flows of illicit money.” That would change under the new legislation, and would require more transparency about senders and receivers. It’s a step that would bring authorities that much closer to regulating crypto, and to crypto functioning like any number of financial instruments.

But in the meantime, the pumps continue and the prices gyrate.

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