Bitcoin hit a new all-time high early Friday after Tesla chief Elon Musk called the cryptocurrency “less dumb” than cash.
The price of the world’s biggest digital coin climbed to a record of $52,954.49 after Musk fired off a pair of tweets defending Tesla’s decision to buy $1.5 billion worth of bitcoin and explaining why the electric-car maker didn’t purchase Dogecoin, his favorite meme-inspired cryptocurrency.
“Tesla’s action is not directly reflective of my opinion,” Musk tweeted Thursday night. “Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company.”
The billionaire tech tycoon was responding to a Bloomberg interview with Binance CEO Changpeng Zhao, who runs the world’s largest cryptocurrency exchange.
Zhao said he was surprised Musk was so “gung-ho” about Dogecoin, which has exploded in value and popularity this year as he and other celebrities embraced it. But Zhao noted that Tesla decided to invest in bitcoin rather than a cult cryptocurrency that was created as a joke.
Musk suggested that cryptocurrency had become a wise investment as central banks pushed interest rates on cash to near or below zero.
“When fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” he tweeted, referring to a term for government-issued currency that’s not backed by a physical commodity like gold.
“Bitcoin is almost as bs as fiat money. The key word is ‘almost,’” Musk added, echoing comments he made in December, when he first expressed interest in moving Tesla’s balance sheet into bitcoin.
Musk latest bullish remarks about bitcoin came amid a growing perception that the digital currency offers protection from inflation.
Tesla’s blockbuster bitcoin investment — which came with an announcement that the automaker would accept bitcoin as payment — was one of several recent signs that cryptocurrency is gaining traction in the mainstream business world.
Mastercard has said it expects to support certain crypto transactions on its network this year, and BNY Mellon, the nation’s oldest bank, recently announced that it would start providing banking services for cryptocurrencies and other digital assets.