Bitcoin’s Troubles Go Far Beyond Elon Musk
All speculative market manias produce signature characters. From the Yale economist Irving Fisher, who, in October, 1929, pronounced that stock prices had reached “what looks like a permanently high plateau,” to Charles Prince, the chief executive of Citigroup, who, in July, 2007, remarked, “As long as the music is playing, you’ve got to get up and dance,” these individuals are forever tied to the bubbles they got caught up in. When the story of bitcoin is written, there will be many crypto boosters to choose from, such as the Winklevoss twins; the hedge-fund manager Paul Tudor Jones; and Cathie Wood, a pioneer of funds devoted to investing in disruptive companies. Right now, though, the individual most clearly associated with bitcoin’s travails is Elon Musk, the C.E.O. of Tesla and SpaceX.
As the Wall Street Journal reported over the weekend, Musk “has become Bitcoin’s biggest influencer, like it or not.” In January, he added “#bitcoin” to his Twitter profile; the following month, Tesla announced that it had bought 1.5 billion dollars’ worth of bitcoin and would accept payment for its electronic vehicles in the digital currency. A couple of weeks ago, however, Tesla reversed course on accepting bitcoin, a decision that Musk attributed to concerns about its environmental impact. (According to some estimates, the electronic mining of new bitcoin consumes more energy than do midsize countries like Argentina and the Netherlands.) After peaking at nearly sixty-five thousand dollars apiece, in April, bitcoin value was already dropping before Tesla’s reversal. Many crypto speculators blamed Musk for adding to the downward pressure, which, at one juncture last week, led to panic selling. Early Monday afternoon, bitcoin was trading at about thirty-seven thousand five hundred dollars.
