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Musk addressed the situation on Twitter on Saturday and threw his weight firmly behind cryptocurrencies.
“The true battle is between fiat & crypto. On balance, I support the latter,” Musk tweeted in response to a follower who asked him about the anger he has faced.
Fiat currency is paper money supported and backed by a government, such as the US dollar.
The crypto crash that followed Tesla’s Bitcoin announcement has seen around $1 trillion wiped off the market’s value, and Bitcoin fell as much as 30 per cent to around $30,000 on Wednesday.
Earlier this month Musk said Tesla’s Bitcoin decision was because of the environmental impact of Bitcoin mining, much of which is powered by cheap coal-powered electricity in China.
Experts have estimated that the Bitcoin industry alone uses as much power each year as a country the size of Malaysia.
Musk announced in February that Tesla had bought $1.5bn worth of Bitcoin and had started to accept it as a payment option.
With prices falling over the lat week, Musk took to Twitter to post the “Diamond hands” emoji, signaling that he was not selling Bitcoin.
The phrase is used by financial traders who hold onto stocks during a sell-off because they see long-term profitability.
Earlier this week Musk also posted a Dogecoin meme on Twitter and assured his followers he had not and would not sell his holdings in it.
The price of Dogecoin fell significantly following Musk’s appearance on Saturday Night Live last month in which he called cryptocurrency a “hustle” during one sketch.
The price of Bitcoin had climbed back up to more than $37,500 on Saturday, down from a high last month of $64,000.