Elon Musk has reignited discussion around Bitcoin, highlighting its unique energy-backed model as a safeguard against inflation caused by excessive fiat currency printing. In his latest comments, Musk aligned Bitcoin’s monetary framework with the growing concerns over global “debasement” linked to government funding for artificial intelligence (AI) development.

Bitcoin vs Fiat: ‘Impossible to Fake Energy’

Responding to analyst platform ZeroHedge, Musk emphasised that Bitcoin’s Proof-of-Work system is grounded in energy expenditure, making it immune to the manipulation often seen with traditional currencies.
“You can issue fake fiat currency, every government in history has done so, but it is impossible to fake energy,” he wrote on X.
ZeroHedge suggested that Bitcoin, gold and silver are gaining momentum due to a looming AI arms race, which major governments, particularly the US and China, may fund through substantial currency issuance.

AI Arms Race and Economic Pressures

ZeroHedge described AI as the new global battleground, predicting significant capital expenditure backed by public funds. This scenario raises fears of inflationary pressure as governments potentially resort to printing more money, prompting investors to seek protection in scarce, energy-based assets such as Bitcoin.

Musk’s Earlier Warnings on Crypto Winter

Musk’s latest remarks mark his first substantial Bitcoin commentary since November 2022, when he warned of a prolonged crypto winter following the collapse of FTX.
“BTC will make it, but might be a long winter,” he posted at the time, as Bitcoin plunged to around $16,000.
The downfall of FTX, caused by misuse of customer funds, triggered an $8.9 billion loss and widespread collapse in investor confidence.

Environmental Debate Still Unresolved

Despite his renewed support for Bitcoin’s economic model, Musk has not revisited his earlier environmental concerns. In May 2021, Tesla halted Bitcoin payments due to heavy fossil fuel reliance in mining operations, sending Bitcoin’s price down by nearly 6% within an hour.
Musk said Tesla may resume Bitcoin transactions once at least 50% of mining relies on renewable energy. While Tesla continues to hold most of its Bitcoin, it has not updated its position on reinstating BTC payments.

Renewable Energy Usage on the Rise

Recent data from climate technology investor Daniel Batten and analyst Willy Woo indicates that Bitcoin mining’s sustainable energy usage has surpassed 55%, reaching an all-time high. This milestone aligns with the renewable threshold Musk outlined in 2021, though he has yet to acknowledge the sector’s progress.