Crypto gains after Musk reveals he owns Ethereum, revised Bitcoin stance

Zack Guzman joins Myles Udland, Brian Sozzi, and Julie Hyman to break down Elon Musk’s most recent comments on cryptocurrency and how these comments will affect the crypto space moving forward.

Video transcript

- There was a much anticipated Bitcoin conference or crypto conference more broadly, that happened yesterday. A lot of heavy hitters there. Elon Musk, Jack Dorsey, Kathy Wood, as Myles just mentioned a few minutes ago. As usual, Elon Musk in particular, a font of quotables from that conference. Zack Guzman was monitoring it along with us.

I'm trying to pick what my favorite one was, Zack. "I might pump, but I don't dump." maybe one of them. He said that about Bitcoin. What stood out to you and the effect or lack thereof on crypto prices?

ZACK GUZMAN: Yeah, it sounds like a setup to a bad joke, right, Julie, when we're talking about two tech billionaires and Kathy Wood walking into a bar here. But it turns out, you get a nice pump with Bitcoin moving shortly after that panel started, past the $32,500 mark. And a lot of people were impressed with what they got from the takeaways here, kind of a tit for tat going back and forth and Elon Musk has already kind of established his groundwork for what he would want to see to return to accepting Bitcoin as a form of currency for Tesla purchases. And again, kind of reiterated that he wanted to see miners shift to more sustainable energy types.

But you're right. To me, I also think that it stood out when he kind of, Elon Musk that is, addressed that he does have some influence on the way that these cryptocurrencies markets tend to trade. More to the upside, maybe less the downside though. I like to joke. We'll play it here because he does it better justice than maybe we do. Take a listen.

Well, maybe we don't have it. I'm not sure if we have it or we don't have.

- Who could say? Truly, who could say, Zack?

ZACK GUZMAN: Maybe we do just need to paraphrase what he says. You're right, Julie. It was that he says and he pumps but he doesn't dump. You noted that Tesla and SpaceX that have it on their balance sheets here, have not necessarily changed their mind in terms of their investment thesis around Bitcoin. He also revealed that he personally holds Bitcoin, alongside some lesser amounts in Ethereum and Dogecoin. And I'm not sure how Cathy Wood and Jack Dorsey reacted there to his kind of a layout of why he's still bullish on Dogecoin, noting that he thinks it's funny in the way that the most ironic outcome tends to be the one that will win in the end. And the fact that he would be entertained by seeing Dogecoin, a cryptocurrency that was started as a joke, eventually pass Bitcoin.

Cathy Wood and Jack Dorsey were a little bit quiet during that period of the conference. But interesting to see how these thinkers think about cryptocurrency and generally came to an agreement there, that it is a net positive. Especially interesting to hear that from Elon Musk as well.

- Well Zach, it's interesting to see Musk's relationship to the other two. As you mentioned, he tends to have maybe a little bit more-- not that Cathy Woods' comments on Bitcoin aren't influential on the price, but certainly not quite to the extent as Musk. I'm curious, I guess maybe as you look at the crypto plex today, where the thought leadership of someone like a Cathy Woods who's invested in a lot of this stuff through her funds and Jack Dorsey who yeah, he owns it, but he's really about the adoption. He doesn't really talk about the price, so far as I can tell. Just where they fit into the crypto complex today, which in this cycle is I think looking a little bit less at the price of all this stuff and where it actually fits into some kind of financial future. Seems like we're at that part of this latest wave.

ZACK GUZMAN: Yeah, and I mean, it's a good point, Myles. You can make the argument that Elon Musk, if it happens that he had started the trend of adding Bitcoin to the balance sheet there at Tesla, he also said it's on the balance sheet that SpaceX, if it happened that other corporations had followed quickly, you could say, look that was pretty important in the adoption cycle. But we didn't see that. And so now you're right to kind of focus in on what can Jack Dorsey do here to kind of drive the next wave of adoption. And what he's talking about doing at Square in the end, could be more important than what we've seen out of Elon Musk because he's talking about building-- the ability to start DeFi, decentralized financial applications, to earn yield.

On the Bitcoin blockchain itself, we've seen a lot of that being built on Ethereum now and some other use cases beyond just the Ethereum and some other chains as well. But to do that on Bitcoin and kind of what Jack Dorsey is talking about doing at Square, there's a good chance that it is going to be more impactful there since we haven't seen corporations latch on. And of course, Elon Musk right after adding it to the Tesla balance sheet, came out and attacked Bitcoin through the lens of sustainability.

So I mean, I think there is a lot to be said, not just about Jack Dorsey's role in all of this, but also to your point, Cathy Woods, in the way that she's really bringing institutional investors along for the ride. And pointing out and maybe correcting at this conference that Elon Musk might be looking incorrectly at Bitcoin through that sustainability lens. As they pointed out, that shift is still ongoing to more sustainable energy types. But an interesting conference and a reminder that you can catch The entire event still on the BWord.org. The B word of course, Bitcoin in this context, guys.

- Of course. I would not have thought it would have been anything else, Zach. Do you think Elon Musk is losing a bit of juice with the crypto community? Sure, Bitcoin is up today, but I thought on comments like he made yesterday, this was a couple of months ago, Bitcoin prices I would argue would be even higher.

ZACK GUZMAN: I mean, I think that that's fair. And we've seen maybe his influence in the space kind of decline the more that he's talked about it. Some people have come out and said that he misunderstands some of the energy components there. And it's complicated, right? When we think about how Bitcoin is being used or are using energy rather, it's something that's still kind of still being understood by even the best scholars out there in the way that it interacts with the grids out there. But we have seen kind of that shift away from Chinese miners in putting in coal.

You can argue that that was going to happen regardless based on the way that China was already cracking down on their miners, but a lot of the attention to Musk's credit, came to it because he flagged it as a concern. And so there is maybe a net positive in the long run, a lot to be celebrated there. But you're right. I mean, I've been tracking this too, ever since he's kind of come out and put a lot of his attention into Dogecoin. Maybe some of those more serious crypto investors have started to maybe shift away from what he says at the drop of a hat here and in the space entirely, really, as I have analyzed kind of the Wario data around positive versus negative sentiment on Twitter at least, generally shifted towards the negative sign there as he's come out and attacked Bitcoin and continued to pump, but not dump Dogecoin, guys. It's important to highlight all that.

- Yes, indeed it is. All right, thanks Zack. Appreciate it.