Does Elon Musk Like Ethereum and Is It on His Radar?

Elon Musk has been actively tweeting about cryptocurrencies especially bitcoin and dogecoin. Does Musk like Ethereum too?

Mohit Oberoi, CFA - Author

May 20 2021, Published 8:22 a.m. ET

There's a bloodbath in cryptocurrencies after China tightened the restrictions on financial institutions and barred them from facilitating crypto transactions. Even before China’s ban, Elon Musk’s antics pulled down Bitcoins. Musk has embraced Dogecoins and is a self-proclaimed "dogefather." Does Musk like Ethereum, the second-largest cryptocurrency?

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Elon Musk has this enviable capacity to influence asset prices with a single tweet. Tesla stock, Bitcoin, Dogecoin, GameStop, Etsy, and Signal (albeit the wrong one) are some of the assets that reacted to Musk’s Twitter activity.

Elon Musk is selling Bitcoin.

Tesla did sell some Bitcoins in the first quarter of 2021 and booked a $102 million gain. The profit helped the company post a record profit in the quarter. While that's history, speculation has been building on whether Musk intends to sell more Bitcoins. His Twitter activity offered mixed signals.

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ethereum coin
Source: Pexels

Ethereum coin

Musk responded to a tweet from handle @CryptoWhale, which speculated that Tesla could sell its Bitcoins this quarter. He replied with “indeed.” However, he soon clarified that the company doesn't plan to sell Bitcoins.

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Even when Musk stopped accepting bitcoin as payments for Tesla cars, he mentioned that the company doesn't intend to sell the Bitcoins that it's holding. However, Musk is known to change his views quickly.

Tesla has golden hands.

Now, in another cryptic tweet, Musk said that Tesla has golden hands. Many took the tweet as another confirmation that Tesla doesn't intend to sell Bitcoins. Tesla might not sell Bitcoins now since their prices have tumbled and the company could end up booking a loss. Looking at the company’s low-profit margins, the loss could potentially wipe off its profitability.

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Did Elon Musk buy Ethereum?

There isn't any publicly available information on whether Musk or Tesla have bought Ethereum. However, given the massive cash on Tesla’s balance sheet and the company’s amended policy, which allows it to invest in any digital asset, there isn't anything stopping the company from investing in Ethereum.

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In the past, Musk has tweeted about Ethereum. In 2018, he tweeted that he wants “ETH even if it is a scam.” In 2019, he tweeted “Ethereum.” Musk is known for such cryptic tweets. However, we don’t know whether he really bought any Ethereum in his personal capacity.

Ethereum cofounder advises Musk on Dogecoins

Charles Hoskinson, the co-founder of Ethereum and later Cardano, gave Musk some advice on how to fix Dogecoins. Musk has embraced Dogecoins even though he ridiculed Bitcoins for their increasing fossil fuel intensity. However, Noelle Acheson, CoinDesk’s director of research, said that the statement isn't correct. She said that the use of fossil fuels in Bitcoin mining is actually falling and not going up like Musk claimed.

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Musk also said that he's working with Dogecoin developers to improve the meme cryptocurrency’s efficiency. Musk had a Twitter poll on whether Tesla should start accepting Dogecoins and most of the users who voted were in favor.

elon musk dogecoin
Source: Dogecoin Facebook

Elon Musk dogecoin meme

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Musk has already started accepting Dogecoins as a payment mode on his privately held space exploration company SpaceX. If he starts accepting Dogecoins on Tesla, it would be a big boost to what started as a joke.

As for Ethereum, we don't know if Musk bought the crypto. We should get some updates on Tesla’s cryptocurrency activity during the earnings call for the second quarter of 2021, which is over two months away.


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