Time Man Of The Year — Elon Musk And Crypto

2021 saw the world trying to recover from the travails of the COVID pandemic. With most people still working from home, social media became even more important as a hub for interaction and communication, and Elon Musk turned it into his playground.

For the last twelve months, Musk irked, mocked, smirked, and laughed his way across social media, causing controversy, sharing memes, discussing his business plans and propping up his favorite cryptocurrencies to his 66 million followers.

2021 – The Year of Elon Musk

2021 also saw Elon Musk become the world’s wealthiest man. His personal fortune went above the $300 billion mark as he dabbled in electric cars, space exploration, and digital currency.

Explaining the thinking behind the decision, TIME’s editor-in-chief Edward Felsenthal said, “Few individuals have had more influence than Musk on life on Earth, and potentially off Earth too.” Felsenthal further pointed at Musk as “The richest example of a massive shift in our society.” The shift Felsenthal was referring to is how fabulously wealthy tech titans are shaping the lives of billions of people around the globe amid growing economic inequality brought to the fore by the COVID pandemic.

The TIME Man of the Year team paid homage to Musk, stating that he had created solutions to an existential crisis and had driven, literally and figuratively, society’s most daring and disruptive transformations.

Under his leadership, Tesla became a trillion-dollar corporation, as demand for electric vehicles grew in the United States and across the world. His other company, SpaceX, also recently launched a crew into space made up entirely of non-astronaut civilians. That launch brought the era of space tourism even closer to becoming a reality.

However, it was Musk’s adventures in crypto that brought the most headlines in an eventful year for the South African-born billionaire.

Elon Musk’s Early History with Cryptocurrencies

Elon Musk’s background as one of the co-founders of the online payment processing company, PayPal, made it almost inevitable that crypto would pique his interest. Cryptocurrencies may be viewed as the evolution of the payment system of which PayPal was a pioneer. Musk and his partners had hoped to achieve the decentralization of currency with PayPal.

Musk claims that he first learned about Bitcoin (BTC) when a close friend sent him some as a gift. The first time he ever spoke about Bitcoin was back in 2014 when he responded to a question by a documentary photographer about his stance on cryptocurrencies. Later that year, he made further reference to Bitcoin in a Vanity Fair interview, claiming it would end up as the primary medium for illegal transactions.

It was three years later, in 2017, that Elon Musk next spoke about Bitcoin. In response to a Medium article by Spase.io founder, Sahil Gupta, which fingered him as the mysterious Satoshi Nakamoto, Musk posted a tweet denying the claim.

In 2018, a group of people hacked into the verified Twitter accounts of filmmaker Pathe UK, and fashion retailer Matalan, who changed the names and pictures of both accounts to Elon Musk. They used the accounts to peddle a fake crypto giveaway requiring unwitting participants to first hand over their digital currencies.

The group made off with over $150,000 worth of crypto before they were stopped. Three people, including a 17-year-old high school graduate from Florida, were charged in relation to the hacking. However, Elon Musk never made any immediate comment regarding the incident.

Influencing the Price of Shiba Inu and Dogecoin

2019 saw the Tesla CEO begin to warm up to crypto. In April that year, he name-dropped Dogecoin (DOGE) in a tweet for the first time, sending the token’s price flying from $0.002 to $0.004. The Tesla CEO stated that he was a big supporter of the meme-inspired token, which he claimed many of his employees at Tesla and SpaceX owned, leading to him dubbing it “The people’s crypto”.

Another crypto whose price critics accuse Musk of influencing is the Shiba Inu (SHIB), whose value jumped significantly every time the Tesla CEO tweeted images of his pet dog, a Shiba Inu puppy named Floki. However, Musk later clarified that he did not own any Shiba Inu, leading to a 15% drop in the meme coin’s price.

Elon Musk’s tweets caused such considerable movements in the value of cryptos that at one point, they became the subject of regulatory scrutiny. For instance, a single-worded tweet Musk sent out on February 4, 2020, led to a 120% increase in the price of DOGE over a four-day period. Since then, Elon Musk has continuously made veiled references to DOGE in his tweets. This habit played a major role in Dogecoin’s value, surpassing the $10 billion mark, making it the tenth biggest cryptocurrency by market capitalization at one time.

However, not all of Elon’s DOGE-inspired tweets have been positive; he once made a post criticizing the token’s unequal distribution. He pointed out that just 50 addresses held more than 60% of its total supply. That post wiped nearly 20% off Dogecoin’s price.

A Love-Hate Relationship with Bitcoin

On February 8, 2020, the electric car manufacturer Tesla, made a filing with the Securities and Exchange Commission (SEC) announcing that it had bought $1.5 billion worth of Bitcoin. The company further let it be known that it would begin accepting Bitcoin as payment for Tesla products. This announcement caused the price of the premier cryptocurrency to shoot to a then all-time high of $64,000.

At a B-Word virtual conference, Elon Musk later revealed that former Twitter CEO Jack Dorsey and Ark Invest’s Cathie Wood, his crypto portfolio held Ether (ETH), Dogecoin, and Bitcoin. The revelation that Musk was an Ether holder blew up the token’s price by more than 10% just hours after the conference.

During the same event, Musk announced that his other company, SpaceX, was also holding Bitcoin in reserve. However, sometime after these revelations, Musk’s relationship with Bitcoin soured when Tesla investors, shareholders, and an assortment of environmentalists raised concerns about the huge amounts of energy used in Bitcoin mining. This group of critics pointed out that Bitcoin’s energy consumption was diametrically opposite Tesla’s eco-friendly image.

In response, Tesla was forced to make an about-turn, and Elon Musk tweeted an announcement of the company’s suspension of Bitcoin payments, leading to the price of Bitcoin plummeting by 15% to $43,000. The tweet also sparked outrage from the Bitcoin community, who pointed out that the Tesla CEO did not know nearly enough about Bitcoin’s energy consumption, to be commenting on it.

There is still hope of Tesla resuming its acceptance of Bitcoin payment if the recent green trend in the cryptocurrency’s energy usage can be sustained.

Conclusion

2021 has been Elon Musk’s year, and the TIME award confirms it. The tech gazillionaire, which some claim is the closest thing to a real-life Tony Stark, has had a tremendous impact on the mainstream acceptance of cryptocurrency. His online flirtation with DOGE made it one of the biggest digital currencies in the world. Heck, even his pet dog inspired a whole new cryptocurrency, the Floki Inu (FLOKI). And Elon Musk’s crypto influence is not just restricted to his millions of followers.

Closer home, his partner, Canadian ethereal nu-metal artist, Grime, sold an NFT (no-fungible tokens) art collection for almost $6 million earlier this year. The collection, dubbed WarNymph, consisted of short video pieces called Earth and Mars, which sold for $7,500 a pop, and longer video pieces called Death of the Old, which sold for as much as $400,000 each.

It remains to be seen whether Elon and Tesla will rekindle their relationship with Bitcoin, and whether the tech mogul will continue promoting meme coins on his Twitter, or whether 2022 will open doors to more exciting ventures for him. But regardless of what the future holds, Elon Musk’s influence on crypto, whether positive or negative, cannot be denied.

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