Hello and welcome to this week's edition of Overbit Insights. In this week's edition, we are speaking on Elon Musk's evolving stance on crypto. Recently Musk says he supports crypto in battle with fiat money.
The Tesla Inc Chief Executive Officer Elon Musk tweeted on Saturday that his support is with crypto in a battle between fiat and cryptocurrencies. "The true battle is between fiat & crypto. On balance, I support the latter," he said
Musk has previously compared Bitcoin to fiat money and often tweets about cryptocurrencies, which have caused Bitcoin and the digital meme currency Dogecoin to fluctuate in value. Bitcoin skyrocketed in February after Tesla announced it had purchased $1.5 billion in the cryptocurrency and would soon accept it as payment for vehicles.
On the other hand, Bitcoin plummeted after Musk revealed in May that Tesla would no longer allow Bitcoin for car purchases, blaming long-brewing environmental issues for a sudden turnaround in the company's stance on the cryptocurrency.
Earlier this month, he also referred to cryptocurrencies as a "hustle" during his appearance as a guest host on the comedy sketch TV show "Saturday Night Live," causing prices to plummet. Musk said two days ago that he has not sold any of his dogecoin holdings and will not sell any in the future.
To close out today's edition of Overbit Insights, we take a look at China and its developments on the e-currency front and how that may impact the cryptocurrency world going forward.
According to Boris Schlossberg, managing director of FX Strategy at BK Asset Management, China's complete control over its digital currency will increase demand for cryptocurrency.
In a note published on Wednesday, he said that China's "total control" over its citizens' wealth and income is the "main catalyst" for the creation of its digital currency.
"The Chinese government has immense influence over the economy thanks to the digital yuan, which is both programmable and trackable. Not only would Chinese policymakers be aware of any consumer decision taken in the economy, but they may also be able to influence spending by having the currency expire on a certain date," Scholssberg penned.
"Yet it is precisely this policy goal that will boost potential demand for crypto," Schlossberg said.
"With many Chinese entrepreneurs and consumers well aware of the government's purpose to exercise complete control over personal properties, the trend of converting at least a portion of one's wealth into crypto assets will continue, despite crypto's inherent volatility."
While this is just one person's take on the situation, we find it essential to consider all nuanced takes like Schlossberg's that weigh in on the relationship between governments and crypto. As we have written before at length, this will be the trend to dominate weeks, months and years to come.