How Fiat Economics Led Elon Musk to Embrace Bitcoin

Elon Musk's efforts to curb excessive spending and inefficiencies in the US government may have been unsuccessful, but they might have been a turning point in his views on Bitcoin.

Elon's Bitcoin Revelation

Musk went viral on social media by suggesting Bitcoin's potential to replace fiat currency, citing its intrinsic link to energy. In a discussion with Indian entrepreneur Nikhil Kamath, Musk stated:

"Energy is the true currency. That's why I say Bitcoin is based on energy."

He further elaborated that energy cannot be legislated or created by law, emphasizing the challenges in generating and harnessing it effectively.

The Role of DOGE and Fiat System Failures

Bitcoin advocate Daniel Batten highlighted on Cointelegraph's Chain Reaction show how Musk's failed attempt with the Department of Government Efficiency (DOGE) led him to reassess fiat monetary systems. Batten remarked:

"He knows that it is not possible to rein in government spending when you have access to infinite money printing."

Musk's background in physics suggests he now sees energy-backed monetary protocols as a robust defense against inflation.

Shifting Perceptions of Bitcoin Mining

Over recent years, the perception of Bitcoin mining's environmental impact has evolved. Misconceptions about its energy consumption have been challenged by research, such as the Cambridge Digital Mining Industry Report. Batten noted:

"They've created policies based on the factually incorrect soundbite that Bitcoin uses a lot of energy per transaction."

He clarified that Bitcoin's energy use is related to mining, not transactions, which is crucial for understanding the network's scalability.

For a detailed analysis of Bitcoin mining, refer to Cointelegraph's 2025 Bitcoin mining deep dive.