Elon Musk has returned to Bitcoin advocacy after years of environmental criticism, calling it “energy money” that cannot be faked, unlike fiat currency. The Tesla CEO tweeted on Tuesday that “you can issue fake fiat currency, and every government in history has done so, but it is impossible to fake energy.”
The endorsement came in response to a post about AI becoming the new “global arms race,” with governments debasing currencies to fund massive computational infrastructure.
Musk framed Bitcoin’s energy-based proof-of-work mining as inherently valuable, comparing it with the unlimited printing of fiat money.
Musk’s Bitcoin Stance Shifts After Three Years of Dogecoin Focus
Bitcoin rebounded to approximately $112,000 following Musk’s comments, recovering from the $102,000 low during the October 10 liquidation event that wiped out over $19 billion in leveraged positions.
Source: TradingViewThe endorsement marks Musk’s strongest pro-Bitcoin rhetoric since Tesla’s 2021 purchases, when the company acquired $1.5 billion in BTC.
Musk’s crypto history has also been volatile and market-moving. Adding “#bitcoin” to his Twitter bio in January 2021 sparked a 10% price surge, while announcing Tesla would accept Bitcoin in February 2021 pushed the token to all-time highs.
However, reversing that decision in May 2021 due to environmental concerns triggered a 12% decline. Tesla later sold 75% of its Bitcoin holdings in Q2 2022 for $936 million, retaining only $184 million worth.
SpaceX also reportedly wrote down $373 million in Bitcoin holdings across 2021 and 2022, although blockchain data shows the company still holds 6,977 BTC, valued at approximately $818 million, under Coinbase Prime custody.
Meanwhile, Musk shifted to championing Dogecoin throughout 2022-2024, integrating it into X (formerly Twitter) and working with developers on transaction efficiency.
In fact, today, when a user commented that “Dogecoin is also based on energy” under his recent Bitcoin tweet, Musk replied with a “” emoji, maintaining his support for the meme coin.
AI Energy Demands Drive Currency Debasement Narrative
Musk’s Bitcoin endorsement is tied directly to concerns about currency debasement, funding AI infrastructure expansion.
The U.S. Department of Energy projects data centers could consume between 325 and 580 terawatt-hours annually by 2028, equivalent to powering 30-50 million homes.
Meeting AI’s projected energy needs would require 40-70 new nuclear reactors by 2028, each producing approximately 8,000 gigawatt-hours (GWh) of energy yearly.
Source: X/@BowTiedFelineThe calculation appears impossible given that the U.S. has added only two reactors in 30 years, with each new plant requiring over a decade to build under current regulations.
Goldman Sachs Research forecasts global data center power demand will surge 165% by 2030, reaching 145 GW.
AI workloads currently account for 14% of data center consumption, but are expected to rise to 27% by 2027, equivalent to approximately 39.15 GW.
By 2040, DNV projects U.S. and Canadian data centers may account for 16% of electricity use, with 12% tied to AI.
Bitcoin currently consumes roughly 198 TWh annually, equivalent to Thailand’s total energy usage.
Single transactions require approximately 1,120 kWh, vastly exceeding the energy consumption of traditional payment systems.
While AI energy consumption is currently lower, projections suggest it could surpass Bitcoin’s total demand within a few years as computational requirements increase.
The energy comparison supports Musk’s framing that “you can’t print energy,” positioning Bitcoin’s proof-of-work mining as anchored to physical resource constraints that fiat currencies lack.
This narrative aligns with broader concerns about monetary debasement, as governments fund technological arms races through the issuance of currency.
Technical Setup Points to Liquidity Sweep Before Recovery
Bitcoin is trading at $111,810 within what analysts identify as a “giant bullish channel” defined by parallel ascending trendlines.
The upper boundary projects toward $127,000-$128,000, while the lower support sits around $103,000-$105,000. The recent liquidation event briefly violated this lower boundary before recovering.
Volume profile analysis has revealed substantial trading activity concentrated between $110,000 and $115,000, with smaller liquidity clusters around $107,000 and $109,000, and larger clusters at $116,000 and $120,000.
Analysts expect Bitcoin to likely sweep downside liquidity toward $107,000-$109,000.
The key $100,000-$103,000 zone remains the make-or-break level determining whether the broader bullish structure holds.
Bitcoin is expected to face consolidation between $110,000 and $116,000, with a probable downside sweep toward $107,000-$109,000 before attempting a recovery toward $116,000-$120,000, where liquidity clusters are present.
Breaking below $100,000-$103,000 support would invalidate the bullish channel structure and indicate deeper correction potential.
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