Elon Musk did a lot to help the electric car go mainstream, and his Starlink system has kept Ukraine online during Putin’s brutal invasion… So, he’s done a couple of good things, but he’s not the planet’s ultimate genius.
A lot of folks follow his crypto moves like they were gospel – they really shouldn’t.
As far as crypto goes, Musk doesn’t have a clue – and I’ll prove it in a second.
So, the fact that Tesla Inc. (TSLA) is selling off 75% of its Bitcoin holdings isn’t anything to write home about, let alone worry about. I mean, the company just needs to get some cash on hand in case the world goes into a recession. They’d have to sell something no matter what.
But here’s a bigger reason: Crypto isn’t about one dude working up his internet fanboys into a frenzy. If all it took to destroy crypto was a big thumbs-down from Elon Musk, then crypto would deserve to die.
But Elon Musk doesn’t control the future of crypto, even if he thinks that he does. The good news is, it’s totally in our hands.
Here’s what I mean…
A History of Dumb Crypto Calls
To really get my point across that the modern face of high-tech industry on social media doesn’t know jack about crypto, all I have to do is point out that Elon Musk has been a huge supporter of Dogecoin (DOGE).
Dogecoin. He openly endorsed it.
He raved about it and announced his plan to “push it into the mainstream.” Tesla actually holds this junk as an asset. The Boring Company accepts it as payment. Not only that, but Musk has also openly claimed Dogecoin to be superior to Bitcoin (BTC) because of its “lower environmental impact.”
Lower environmental impact – technically true, but then again spilling a bucket of toxic waste has a lower impact than swan-diving into a pool of it.
What Musk isn’t saying is that Dogecoin is only more “environmentally friendly” because it’s such a complete joke that barely anyone wants to mine it. And do mean it’s a joke, specifically a joke played on people who they can make money off of it.
By the way, if cryptocurrency project wants to go green, it moves toward proof-of-stake validation, like Ether is doing.
It gets worse…
Not Many Popular Cryptos Are This Bad
Just as bad, it’s an inflationary cryptocurrency whose supply will just keep going up and up and up. That’s bad tokenomics according to my 5 Ts crypto rating system. We can’t expect it to hold its value long term.
It doesn’t pass my T-for-team test, either. It was created by two guys who made no secret of the fact that it was satire. The “team” behind it is essentially thousands of Redditors.
It also completely fails to satisfy another of my Ts: technology. It’s got no innovative tech to give it a leg up over bedrock cryptos like Bitcoin and Ethereum. It uses the same basic proof-of-work blockchain concept with no new features and sketchy use cases at best. It’s not even better for everyday commerce because it’s too unstable and gets too much attention from speculators… like Elon Musk.
As for timing and token, it doesn’t rate too highly there, either. Why buy it after it’s already exploded and collapsed in price, knowing what we all know now? DOGE doesn’t really solve any problem, either, except maybe boredom.
For the record, DOGE satisfies exactly zero of my five “T” criteria.
The bottom line is that Dogecoin is garbage. Why has Elon Musk been so publicly supportive of it? Maybe It’s a pump and dump with plausible deniability. Maybe all the public praise has gone to his head and made him think he knows everything. Maybe he has more money than he knows what to do with.
We should all be so lucky, right?
So, Elon – super-cool that you’ve taken EVs mainstream and managed to spit in Putin’s eye. Good luck with the Mars, thing, too.