I am really liking how Elon is handling Bitcoin personally and for his companies. He's bullish BTC *AS HE SHOULD BE*
but trying to balance its value against countering Tesla's mission.
There's some short term pain for Tesla not accepting BTC, but Tesla holding bitcoin will see incredible appreciation in less than 3 years as the daily supply halves.
No Wall Street or Main Street models have looked at supply halving every 4 years. Hidden upside to Tesla just HODL for 3 years even if no change from today's price.
4D Chess Take is:
Elon expects BTC to be a great asset for him and Tesla. It was worth "tanking" the price SHORT TERM to remove the incentive to use the dirtiest of all energy sources to produce it.
The supply going down is only a good thing if demand stays high. The supply of new DVDs on the market has dropped dramatically over the last 10 years, but the old DVDs sitting on your shelf are not worth much because demand has dropped too.
As people become aware of the energy demands for BTC trading as well as mining, interest in BTC declines. It's true that mining and trading energy demands can be met with renewables, but we need the renewable energy for other things too. Every renewable GWH that goes into supporting crypto currencies is a GWH that isn't going to some other use and the difference has to be made up with non-renewable energy sources. IMO using renewables for crypto is a form of kicking the can over the fence. Extra fossil fuels will be burned because there is only so much wind, solar, and hydro available. If there was an oversupply of renewables to a point where renewable energy plants were idle due to oversupply, then the argument for using renewables for crypto make sense, but we're years away from that situation, if ever.
Even with the energy issues aside, it's still unclear whether crypto currencies are going to be around for the long haul or if they will be looked back on as temporary insantiy like tulip mania.
Sometimes speculative bubbles can lead to long term stable companies and/or technologies. The dot-com boom was a speculative bubble. There were lots of internet start ups that flashed and died during the late 90s. A few companies emerged from that time as industry leaders, Google and Amazon among the strongest.
The electric car industry is in sort of a speculative bubble now. Tesla appears extremely likely to survive and become a leader in the industry for the foreseeable future, but a number of electric vehicle start ups have already failed and others are on their way to join the dodo bird in the next year or two. Traditional car makers are beginning to jump on the bandwagon.
There were observable benefits to the internet from the invention of the world wide web. It took a few years and quite a few false starts to figure out the best way to use it, but we've managed to come up with a workable system and the companies that made the right bets at the right time are reaping huge rewards.
Same thing with electric vehicles. Not everyone is convinced that they will replace ICE yet, at least not soon, but anyone who has done a dive into the technology can see EVs are just superior in almost every way.
There is some commerce going on with crypto, but the bulk of its use to date is trading it to other investors and black market transactions. There are a number of pretty severe drawbacks like it is easy to lose and easy to steal with little recourse. It has a high energy budget compared to other financial instruments. It's lack of backing by any government is seen by some as an advantage, but by quite a few others as a disadvantage.
Crypto may become a measurable part of the world economy in the next few years, or it may become as valuable as tulip growing is today. Tulips are grown commercially and you can buy the bulbs in the spring and plant them. But they are hardly a speck on the world economic stage.
www.bloomberg.com
finance.yahoo.com
