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Very perplexing behavior from Musk, I must say. Bitcoin's energy consumption has been front-and-center for a few years now and even more so when the bull market
by sakopov 5y ago
Very perplexing behavior from Musk, I must say. Bitcoin's energy consumption has been front-and-center for a few years now and even more so when the bull market got hot. How does Musk decide to throw $1.5 billion worth of Tesla's cash into BTC without acknowledging this? I was expecting a little bit more due-diligence from him, but he's been absolutely consumed by crypto markets in general.
- notyourwork 5y agoThis looks like a pump and dump scheme in its finest form. Nothing changed over last year in regards to energy consumption. There's no way that Elon or those in Tesla discussing this were not aware of this prior.
- paulpauper 5y agobut in a pump and dump scheme the dump is the result of the orginal pumpers selling, not from the pumpers wanting to make the stock go down. It is in the interests of the pumpers to keep the stock price inflated as long as possible.
- ASalazarMX 5y agoPump and deflate? That evil Elon is at it again.
- 988747 5y agoOk, so what if Elon decided that Tesla's current Bitcoin holdings are too small, and is looking to depress price to buy even more BTC?
- slg 5y agoHow is this a pump and dump? They never dumped. It is certainly stupidity from Musk, but I don't know why you are implying maliciousness when they are still holding Bitcoin and therefore they are equally hurt by this drop in value.
- phire 5y agoTesla might not have dumped. But I'd be very interested to see Musk's personal trading accounts, and the trading accounts of his close associates.
- novaRom 5y agoThis is why SEC department exists: sec.gov Musk should be investigated, this is not the first time his actions lead to massive market perturbations.
- seunosewa 5y agoI bet he is already being investigated. It is highly unlikely that regulators haven't noticed what he is up to.
- slg 5y agoIt is incredibly hard to imagine that the upside in Musk's personal Bitcoin stake, whatever it is, is anywhere close to approaching his personal stake in Tesla. Something like 70% of his net worth is Tesla stock. It would be unbelievably stupid to jeopardize the value of the Tesla stock to pump up the value of his Bitcoin holdings. Some of these anti-Musk conspiracy theories are truly crazy especially considering the man is so out there that you don't even need to fabricate weird theories like this to make him look bad.
- capableweb 5y ago> It is incredibly hard to image that the upside in Musk's personal Bitcoin stake, whatever it is, is anywhere close to approaching his personal stake in Tesla. Something like 70% of his net worth is Tesla stock. It would be unbelievably stupid to jeopardize the value of the Tesla stock to pump up the value of his Bitcoin holdings. I think it's fair to suspect something here though, and question Musks behavior these last few years. Yes, originally he wanted to save the world with Tesla and also find a new world with SpaceX (at least that was the outspoken goals), but his current dealings that skirt on legality of things, gives another side of him. Some people who seemed to be driven by the goodness of their heart ends up chasing the same money-dragon as many before them. It's not impossible.
- throwkeep 5y agoA pump and dump is approximately the least likely explanation.
- pumaontheprowl 5y agoHow are you downvoted for this? Tesla directly lost over $100M as a result of this decision. If this was a pump-and-dumb, they did a horrible job of it. Also, a pump-and-dump scheme doesn't require you to crash the price of an asset after you exit your position. Suggesting this was a pump-and-dump is flat-out idiocy. More likely is that Musk liked the idea of Bitcoin, but got a lot of pressure from environmental activists after committing to it and decided it wasn't worth it anymore. Companies change their positions based on the outcry of political activists all the time. That's far more believable than saying Musk tanked his own company in effort to execute the worst pump-and-dump of all time.
- throwkeep 5y agoRight, that's a much more likely explanation.
- hinkley 5y agoElon is a gambler on a hot streak. He keeps making big bets that pay off, but the luck to cunning ratio is dangerously high. Some day the shoe is going to go cold and he's going to be fucked. He'll drop off the richest people list faster than he climbed it (which was too fast).
- BoorishBears 5y agoUnfortunately that's not how the current setup works. The most successful the gambler is, the more of other's people they get to gamble. He's at that point where he could never be right again and it'd never personally affect him. I mean if Tesla goes to 100 tomorrow morning, who gets hurt more? Elon or instructional investors that are supposed to be funding things like pensions?
- hinkley 5y agoHe has a track record of using all of his assets to save one. It worked before, so he will try it again, until it doesn't.
- BoorishBears 5y agoWhy would he try it again? At this point what bet would require all of his assets like before?
- hinkley 5y agoI think once SpaceX gets big, he will get so focused on milestones that if he loses some astronauts and gets sued for damages, he's likely to leverage everything he has for more flights. No matter how safe those ships are, they're not infallible, so while it may be a safe bet it's not a guaranteed bet. If another crashes after that, or he loses contracts, he could be filing for bankruptcy, and taking Tesla down with him.
- ecpottinger 5y agoAssume Tesla stock fell to 100. Well I bought mt stock at 189 pre-split, so the share I bought at 189 are still worth 500. It is the day traders who get hurt, but the people in it for the long haul are still doing fine. I always get a laugh for the people trying to scare people that Tesla stock will fall while not realizing a lot of the early purchaser will still make a profit even it the stock tanks big.
- deleted 5y ago[deleted]
- soheil 5y agoYes, except Tesla is still holding a massive amount of bitcoin. Maybe they want their books to show a loss next quarter?
- notyourwork 5y agoOr maybe privately Elon and related made buys and sells before, during and after these news events. Something like: 1. Buy BTC 2. Announce Tesla will accept BTC. 3. Sell BTC. 4. Announce Tesla will no longer accept BTC.
- bttrfl 5y agowhy is it downvoted?
- bhay 5y agoPlot twist: he already knew.
- freshair 5y agoI don't think it has anything to do with energy or the environment. I think Elon Musk distancing himself from Bitcoin is a consequence of the recent spat of highly publicized ransomware attacks using bitcoin. Elon Musk is connected to the military-industrial complex; it is plausible the federal government has given him forewarning of an impending war on crypto currencies, to make sure their asset, the guy who launches lots of their satellites, doesn't get caught in the crossfire. This is pure speculation of course.
- Robotbeat 5y agoYeah, this is more plausible. I think it’s multiple factors simultaneously including the bad PR from the environmental footprint. And it’s kind of funny because Musk has never been a full throated promoter of cryptocurrency ever. Social media is full of people pumping crypto and yet Musk has regularly made technically-accurate skeptical comments about bitcoin or similar cryptocurrency.
- cpwright 5y agoI think the Colonial attack has made many people think about cryptocurrencies and the potential for more regulation given the publicity and impact to society. There is no need for him to get any special "tip" to make that determination, or at least have it part of the mosaic of information he uses to evaluate cryptocurrencies.
- _Microft 5y agoMy take: this was calculated. Notice an opportunity for easy money and get into Bitcoin under the pretense of selling cars for it, then pull out "temporarily" citing environmental reasons. They are now in a comfortable position to hold onto it for how long they might want to, without getting too many questions why a car maker is speculating with crypto coins. If they might need cash (or have to pretty up the quarterly results) one day, cash out some. In the meantime, post doge memes to keep crypto in people's minds. Profit.
- BitwiseFool 5y agoI suspect it was a brand-saving decision for Tesla. All of the press about Bitcoin's carbon footprint resulted in very bad PR and I suspect this is a reaction to that.
- dubcanada 5y agoHe's not an idiot, the people who praise him as a god and follow his every word and beckon are. Musk is extremely smart, he knows Bitcoin energy consumption is high and unsustainable. And he knows how to manipulate a bunch of people who have no idea what they are investing in/how to invest. What he did (and this is pure speculation) is a basic pump and dump (well sort of dump, I guess they still have a bunch?). Bought a bunch of Bitcoin, pumped it WAY up, and sold a bunch so TSLA hits revenue targets. A win win for Musk, and it's perfectly legal (versus the other time he tried and got slapped on the wrist by the SEC). The fact Bitcoin/cryptocurrency drops 365B after someone sends out a tweet is another issue. It's true markets are highly encouraged by global issues (such as Trump tweets sending stocks high or low) but the fact that Bitcoin went down 15%~ after a single tweet is an issue. It's way to easy to manipulate it, and that's really bad.
- fma 5y agoAlso it's possible that even if he doesn't sell bitcoin, he can take a short position, i.e. via GBTC which closely mirrors the movements of BTC.
- Glavnokoman 5y agolooks like like idiots do not like being called as such :)
- myth_buster 5y agoTesla seeks entry into U.S. renewable fuel credit market - sources - May 12, 2021 9:33 AM PT https://www.reuters.com/business/sustainable-business/exclusive-tesla-seeks-entry-into-us-renewable-fuel-credit-market-sources-2021-05-12/ https://www.reuters.com/business/sustainable-business/exclus...
- alexnewman 5y agoPeople claimed BTC power use was overblown. It turns out it wasn’t overblown. We now have amazing alternatives which are safe and clean. https://medium.com/mobilecoin/mobilecoin-saves-on-environmental-footprint-483da1728518 https://medium.com/mobilecoin/mobilecoin-saves-on-environmen...
- hinkley 5y agoI'm going through another vivid round of realizing that my parents are humans. They tell you that will happen to you one day, they don't tell you it'll happen over and over. Musk, a human being with more power than any one person can handle, makes a decision, then other people and events convince him he made a mistake, and he changes back to his old stance. That we don't want politicians and public figures to ever change their minds says much more about what is wrong with us than what is wrong with them. What is pretty weird to me though was that I feel like he could have hedged this much better by taking a middle ground. If you want to accumulate a position in an asset, and you have a ridiculous amount of money, don't you do the Warren Buffet method of grabbing it a little at a time, maybe when nobody is looking? If you were trying to build a position in silver, and your company accepts it as payment, don't you keep spending your other assets and just keep all of the silver that your customers pay you with?
- ben_w 5y agoIt’s only perplexing if you assume he knows all that you know. Musk appears to be a fantastically competent salesman and decent rocket scientist, but we shouldn’t expect him to have the Midas touch on other fields of competence. And while Musk ought to employ people to warn him about all the issues he now cites as why he changed policy, remember that he did start The Boring Company in response to getting stuck in a traffic jam, and got in trouble with the SEC for repeatedly tweeting stuff that CEOs are not supposed to tweet, and tried to name his kid X Æ A-12 — I assume he has sycophants telling him his every idea is fantastic no matter what he does, just as he has anti-sycophants (sychokrupho? My Greek is terrible) yelling as loudly as possible that he’s evil for failing to spend his money on their pet project.
- lhorie 5y agoDisclaimer: this is just my speculation My guess is that he just isn't very savvy about cryptocurrencies in terms of implementation mechanics and legitimately didn't understand the extent of bitcoin energy consumption until the drop in April brought up that correlation front and center in the news when the price drop was attributed to a disruption in mining due a blackout in China. It wouldn't be the first time where he jumped into some topic outside his immediate area of expertise and proceed to get criticized for missing some critical nuances (e.g. the ventilator donation thing, the submarine rescue in Thailand thing)
- varispeed 5y agoHe is going to blame this on Aspergers. I think this behaviour should be illegal if it is not already.
- orblivion 5y agoOkay, here's my Big Brain, 4D Chess take: Elon Musk wanted to adopt Bitcoin, but he knew there was this big problem with energy consumption. It's bad for his brand, and perhaps goes against his own ethics. Could he say "hey, get the energy consumption down and I'll go all-in with Tesla"? People wouldn't think much of it. Better option: Buy a huge stake in Bitcoin, announce that he'll be accepting bitcoin at Tesla, get people really excited, heat up the market, and then pull it out from under them. Now all of the big stakeholders in Bitcoin have a clear, almost measurable incentive to clean up bitcoin's act. If Bitcoin adopts proof-of-stake or whatever needs to happen to bring down energy consumption, people will look back and thank Elon Musk for it.
- latchkey 5y agohttps://www.bloomberg.com/opinion/articles/2021-05-13/elon-musk-got-bored-of-bitcoin https://www.bloomberg.com/opinion/articles/2021-05-13/elon-m... Surely by next week he’ll be tweeting, like, “we are building a giant battery in the desert to mine Bitcoin, Bitcoin is good again, you can use it to pay for Teslas,” and the price will shoot back up, and I’ll once again hit the button that auto-generates this column.
- rjbwork 5y agoLol. I freaking love Money Stuff. Levine writes so clearly and humorously on so many modern finance topics.
- hef19898 5y agoThere was a time Porsche made more profits than revenue, back before the 2008 crash. Mainly due to financial shenanigans, primarily with VW. Came crashing down in 2008 with the failed acquisition of VW, that ended with a merger of kinds. Maybe Tesla ends up in a similar situation, making the majority of it profits from Bitcoin. Wouldn't be to bad for them short term, it would mud the waters regarding Tesla even more so.
- delaaxe 5y agoIt's not that complicated: https://arstechnica.com/tech-policy/2021/05/private-equity-firm-revives-zombie-fossil-fuel-power-plant-to-mine-bitcoin/ https://arstechnica.com/tech-policy/2021/05/private-equity-f...
- wonderwonder 5y agoMy theory is that he realized how many people he ruined with the SNL / hustle bit when doge coin dropped and he is trying to get out of it. Probably something he should of considered ahead of time, the music was always going to stop. The space x satellite was his attempt to right it but now he wants to get out and focus on his core work. That or his board of directors threatened to pitch him if he did not get out.
- erentz 5y agoThat doesn’t fit given he is still pumping Doge since his announcement about BTC. https://twitter.com/elonmusk/status/1392974251011895300?s=21 https://twitter.com/elonmusk/status/1392974251011895300?s=21 https://twitter.com/elonmusk/status/1392030108274159619?s=21 https://twitter.com/elonmusk/status/1392030108274159619?s=21
- wonderwonder 5y agoYeah, saw this. At this point I don't think he even knows what he is doing. There are no active Doge devs. https://twitter.com/elonmusk/status/1392974251011895300 https://twitter.com/elonmusk/status/1392974251011895300
- admissionsguy 5y agoI think Musk is not taking cryptocurrencies or life in general as seriously as most commenters here. Which is quite alright and refreshing, to be honest.
- soheil 5y agoNo I think he is, he just doesn't like to show his hand.
- pkulak 5y agoCus he's not that bright. Isn't this the elephant in the room that no one wants to consider? Why do we have to start with the assumption that Musk is a genius, then work back from that? The dude thought covid would go away last May. He thinks it's easier to make Mars habitable than it is to keep the Earth habitable. He's thought that full self driving was 6 months away for literally 4 years now. And he didn't really understand what Bitcoin was when he sank 1.5 billion into it.
- onion2k 5y agoSpaceX wins lots of space contracts with the help of Musk's "Occupy Mars" marketing. Tesla sells lots of cars on the promise of self-driving in the marketing. Musk bought BTC, single-handedly pumped the price of BTC, and then sold at a huge profit. I don't think he's a genius but Musk is definitely not stupid. He's just not playing the obvious game you think he's playing.
- pkulak 5y agoAnd denying covid kept workers in his factory, against the law. I think there needs to be some rule in discussion that as soon as you start arguing over if someone is dumb or evil, you have to stop. It's impossible to figure out which (or what mix) it actually is.
- jokoon 5y agoBecause btc helps money launderers and politically it becomes delicate.
- zamfi 5y agoElon probably read about the retired coal power plant in New York state that's being retrofitted and brought back to life for the explicit purpose of mining bitcoin [0]. Honestly, this is really frankly terrible. Even though I knew that the power consumption of bitcoin miners was high before reading this story, this particular concrete example still moved me. One could easily be tempted to think "sure it's power-intensive, but this will all move to solar/wind along with the rest of the grid"---but it's hard to square that with stories about dirty power being spun up explicitly for mining. [0] https://arstechnica.com/tech-policy/2021/05/private-equity-firm-revives-zombie-fossil-fuel-power-plant-to-mine-bitcoin/ https://arstechnica.com/tech-policy/2021/05/private-equity-f...
- NickM 5y agoI think a lot of people realize Bitcoin consumes a lot of energy without necessarily realizing the extent to which the energy consumption correlates with the price of BTC. After pushing up the price of BTC with a $1.5B purchase and a bunch of tweets, it might have been a bit of a wake-up call to then subsequently see the electricity usage of the network immediately start to skyrocket (he did recently tweet a link to cbeci.org). He really should have known better, but all that said it's not hard to imagine how this could've played out behind the scenes. He's previously mentioned having trusted friends who convinced him of the value of crypto, and he may have genuinely believed that it would drive growth of renewables long-term, but then changed his views as he became more aware of the damage this is causing in the here and now.
- humaniania 5y agoProbably for the same reason he tweets about doge. IMO he's pointing out how absurd and dangerous the crypto market is. Cryptocurrency needs regulation and controls before it does significant damage. The manipulators are having a field day right now.
- Geee 5y agoActually he understands that Bitcoin's energy consumption is not a problem. This tweet signals that he wants that energy production must be sustainable. He wants to influence miners to move to sustainable energy. He puts up a clear incentive: if miners move to sustainable energy, then Tesla will accept bitcoin again.
- mbesto 5y agoTwo very plausible theories: - Musk is not very smart, or at least doesn't always think decisions through or go through proper due diligence(we have evidence for this: see SEC tweets, thai children rescue, excessive management turnover, etc.) - He (and Tesla management) know he can manipulate the crypto market. So they (first) bought $1.5B in BTC unknowingly to the public, (second) told the market they did (third) sold the BTC unknowingly to the public and (fourth) told the market that it wasn't viable and all the while keeping the profits so they can keep wall street happy/distracted from less than ideal financial performance figures. Crypto advocates want democratization of currency. Well here ya go - whales can easily manipulate the system.
- tsycho 5y ago"Elon Musk is a bullshitter who delivers. This breaks a lot of people's pattern-matching, in both directions." --Ben Evans (https://twitter.com/benedictevans/status/1358760338724974594?lang=en https://twitter.com/benedictevans/status/1358760338724974594...)
- agumonkey 5y agoSo perplexing we all can bet the argument is bogus and there's a hidden agenda. Few ideas: - using another crypto and discrediting bitcoin to move capital onto others (apparently cardano price didn't crash.. yay for Haskell I guess) - Tesla having its own token ? - Simply toying with panic to buy more. Tesla has solar panel, batteries, and custom ASIC know how or partnership, they could also have their own system in the pipelines now. And with the microgrid rumor (far fetched but I heard the idea propped up by another car brand on radio the other day... Surprising). Maybe an energy currency ?
- glitchc 5y agoIt’s a ploy. He’s treating Bitcoin as a tax shelter for Tesla profits.
- deleted 5y ago[deleted]
- matheusmoreira 5y agoLooks like Tesla is getting into the renewable fuel credit market: https://www.businessinsider.com/tesla-renewable-fuel-credits-market-application-epa-reuters-sources-oil-2021-5 https://www.businessinsider.com/tesla-renewable-fuel-credits... Probably means his tweets are nothing but greenwashing.
- supermatt 5y agoIt’s not simply bitcoins energy consumption - it’s the energy consumption relative to other PoW cryptocurrencies. There was a study published recently showing that Bitcoin uses more than 2000x more energy per transaction than dogecoin, for example. No doubt it is this revelation that has made musk reconsider which cryptocurrency he should be backing.
- idiotsecant 5y agoNot so perplexing. It's just as easy in crypto to make money on price rises as it is price dumps. It's legal market manipulation.
- vanusa 5y agoHow does Musk decide to throw $1.5 billion worth of Tesla's cash into BTC without acknowledging this? Easy. By being the nutjob that he transparently is and has been for several years now. The only mystery here is why so many people seem willing to hitch their wagons to a financial "instrument" whose trading value is so critically dependent on the whims and effluents of such a person.
- fn1 5y agoMaybe that was his intention: Raising awareness for the energy-consumption of the bitcoin-network by pulling a PR-stunt like this.