Tesla, Bitcoin and Silver

Elon Musk is a popular man. That's evident from the way markets react to his tweets. The other day, he tweeted something derogatory about Game Stop shorts and the stock went up. Then he said something nice about Bitcoin which made it pop higher. Having been attacked by short sellers himself, it's easy to understand Musk's glee at the sight of crushed short sellers in Game Stop, but why did he tweet about Bitcoin? It seems unrelated to his businesses.

Musk's followers will undoubtedly argue that Bitcoin is technology just like Tesla, Space X and solar panels, and that's his motivation. He was simply promoting technology as the way of the future. However, there's also the possibility that his tweet was motivated by something entirely different.

Musk's Bitcoin tweet came at a time when a rumble could be heard in the silver markets. There was talk of a coordinated push, the aim of which was to send silver prises soaring. That would be bad for Musk who uses silver in the production of cars, rockets and solar panels. Higher prices for silver would translate directly into higher input costs for his products. Sensing trouble ahead for silver, Musk decided to do his part in deflecting attention to that other asset popular among his followers, namely Bitcoin.

A change in the price of Bitcoin does nothing to the price of Musk's products. Bitcoin is therefore the perfect distraction. What Musk's Bitcoin tweet reveals is the importance of Bitcoin as a tool used in the manipulation of the commodity markets. With speculation mainly taking place in virtual currencies, completely detached from the real world, Musk and his buddies can manipulate prices of commodities, unhindered by speculators. Industrialists like Musk depend in this way on Bitcoin as a means to serve themselves, and that's the true motivation for his tweet.

Elon Musk

By Duncan.Hull - Own work, CC BY-SA 4.0, Link