lon Musk broke a three-year silence on BTC, calling it inflation-proof amid rising AI-driven fiat spending. His comments sparked renewed debate over Bitcoin’s energy use and value proposition in a rapidly digitizing economy.
Musk Backs Bitcoin in Response to AI Spending Concerns
Tesla CEO Elon Musk publicly endorsed Bitcoin’s energy-based proof-of-work model in an Oct. 13 post on X, calling it a safeguard against fiat currency manipulation. Musk responded “True” to financial outlet ZeroHedge’s claim that rising Bitcoin, gold, and silver prices are driven by fiat debasement used to fund the AI arms race.
“That is why Bitcoin is based on energy,” Musk added. “You can issue fake fiat currency, and every government in history has done so, but it is impossible to fake energy.”
The post marks Musk’s first notable comment on Bitcoin since November 2022, when he forecasted a “long winter” for crypto following the FTX collapse.
AI Arms Race Fuels Inflation Fears, Crypto Demand
ZeroHedge pointed to increasing capital expenditures in artificial intelligence by governments in the U.S. and China as a driver for inflationary policies.
“AI is the new global arms race,” ZeroHedge posted. “If you want to know why gold, silver, and Bitcoin are soaring, it’s the debasement to fund the AI arms race.”
Bitcoin’s resistance to inflation—due to its capped supply and energy-backed issuance—is once again drawing attention from both analysts and institutional holders.
Bitcoin, Tesla, and the Energy Debate
Musk’s renewed support contrasts with his prior criticism of Bitcoin mining’s environmental impact. In May 2021, Tesla suspended BTC payments over concerns about fossil fuel usage in mining, prompting a swift 6% price drop.
By July 2022, Tesla sold roughly 75% of its Bitcoin holdings, worth about $936 million. The company cited liquidity needs amid COVID-19 lockdowns in China. Still, Tesla retained a significant position and currently holds approximately 11,509 BTC, valued at around $1.29 billion, per Arkham Intelligence.
Musk has not yet updated Tesla’s stance on accepting Bitcoin for payments. He previously stated BTC transactions could resume if mining operations reached at least 50% renewable energy use—a milestone reportedly surpassed, reaching over 55% clean energy adoption according to analyst Daniel Batten.
Outlook: Is Bitcoin Back in Musk’s Good Graces?
Musk’s comments may signal renewed institutional confidence in Bitcoin, especially as governments ramp up spending on emerging technologies. While Tesla’s actions toward BTC remain cautious, Musk’s framing of Bitcoin as “impossible to fake” positions it as a strategic hedge against inflation in the digital age.
