The "true intention" behind the cryptocurrency circle leader Musk's ability to call the wind and summon the rain
Having tasted the sweetness of Bitcoin, Musk has also turned his attention to the lesser-known Dogecoin.This article is sourced from Wall Street News, authored by Le Ming.
Musk's recent series of operations regarding cryptocurrency has been dazzling, and his influence on the cryptocurrency market has indeed established his position as a global "master."
However, Musk's recent announcement that Tesla will no longer accept Bitcoin payments has angered the co-founder of Dogecoin.
Palmer (Jackson Palmer) tweeted on May 13 (Thursday) that Musk has always been a selfish fraud, and this will continue in the future. However, he quickly deleted this tweet.
However, Master Musk's "strange operations" have indeed left people confused: do you support cryptocurrency or oppose it? One moment he says he wants to send Dogecoin to the moon, and the next he claims Dogecoin is a scam; one moment he announces Tesla will accept Bitcoin as a payment method, and the next he retracts it, saying Bitcoin's energy consumption is too high and does not align with Tesla's energy-saving and environmentally friendly image.
These are just the surface; behind the scenes, it is determined by the "dual struggle" that Master Musk is conducting. Musk is leveraging the power of the cryptocurrency market and his fans to win these two wars.
The cryptocurrency world will also undergo earth-shattering changes due to the new master battle.
I. Two Wars
Those familiar with Musk know that besides having two very high-profile and impressive companies, he has been engaged in two wars that have never ceased.
Since Tesla and SpaceX are two companies that are almost unprofitable but burn a lot of cash, Musk has always faced pressure for financing.
Do you remember Musk's lament in 2018? Musk tearfully recalled the immense pressure he faced, stating that the past year was the "most difficult and painful year" of his career, largely due to Tesla's short sellers.
As an industrial capitalist, Musk fears financial capitalists the most. Tesla has survived to this day largely thanks to financial capital: in 2004, Musk led the Series A round for Tesla, becoming the largest shareholder with less than $7.5 million of personal funds (Musk's current net worth is in the billions, with a "cost" of only ten million);
After leading the Series A round, Musk quickly led the $13 million Series B round, and soon in 2006, he co-led the $40 million Series C round. Due to the rapid cash burn, in 2007, Musk led the fourth round of financing of $45 million, persuading two Google founders to participate.
In 2008, Tesla was on the brink of bankruptcy, and Musk persuaded Daimler to exchange $50 million for a 10% stake in Tesla, pulling the company back from the edge of collapse.
Shortly after, in 2010, Toyota was also persuaded to provide about $50 million in financing to Tesla.
In 2009, the U.S. Department of Energy provided Tesla with a $465 million low-interest loan through the "Advanced Technology Vehicles Manufacturing Loan Program." This loan further leveraged private capital. On June 29, 2010, Tesla went public on NASDAQ, raising $226 million at a price of $17 per share.
In 2013, Tesla raised $1.02 billion from the capital markets (including $660 million in bonds) and fully repaid the previous loans from the U.S. Department of Energy; in 2014, it raised another $2 billion to build factories; in 2015, it raised $738 million to produce Model X; and then in 2016, it raised $1.46 billion for Model 3. After so many rounds of financing, Musk has always been the largest shareholder of Tesla.
In 2018, facing short selling in the capital market, Musk "cried"—he was on the verge of collapse, with no financing and being shorted, which meant that when Tesla was about to bear fruit, he would have to yield to financial capital and relinquish control. (Financial capital controls industry, and the normal way is to provide financing and gradually gain control; when control cannot be obtained, it usually results in losing financing ability, ultimately having to sell at a low price, allowing financial capital to come back and buy, thus gaining control.) This is like raising your own child and then giving them away for free to work for others.
At the same time, Musk began to spread "fake news" about privatization, drawing the attention of U.S. regulators. From then on, Musk had a confrontation with U.S. regulators, and "Iron Man" had his grievances: you let these financial capitalists short my company and steal my labor fruits without intervention, and when I fight back, you come after me!?
II. The "Weapons" of the Cryptocurrency World
Afterward, although Musk survived, he knew that one day financial capital would return. There are still many people betting against Tesla, and Tesla is not strong enough to generate its own blood and refute all doubts.
Thus, the cryptocurrency world, independent of the existing financial system, provided Musk with an "out."
Musk first tested the waters with Bitcoin. After buying Bitcoin at a low price, Musk began to promote it on Twitter, which has 50 million followers.
On December 20, 2020, Musk tweeted about Bitcoin (at that time, Bitcoin's market value was only $20,000).
Then, on January 29, Musk changed his entire Twitter "bio" to Bitcoin.
Image: On January 29, after Musk updated his Twitter, Bitcoin surged by $800 in a short time, reaching as high as $32,000 each.
Musk tasted the sweetness of financing with Bitcoin. Tesla's subsequent "announcement" showed that as of March 31, 2020, the fair market value of the Bitcoin held by the company was $2.48 billion; this means that if the company were to cash out this cryptocurrency, it could expect to record about $1 billion in investment gains.
On March 31, Bitcoin's price closed at $59,000, and out of the $2.48 billion market value, $1 billion was profit, indicating that Tesla's average cost for Bitcoin holdings was less than $25,000 each.
In other words, Musk had already "ambushed" before promoting Bitcoin.
Thanks to Bitcoin, Tesla achieved its highest quarterly profit in history in the first quarter of this year: $440 million, of which selling Bitcoin brought in $100 million in "profit," while selling cars resulted in a loss of over $100 million, with the remaining profit coming from selling carbon credits.
Having tasted the sweetness of Bitcoin, Musk also turned his attention to the little-known Dogecoin. Before Musk rallied for Dogecoin, its price was only about $0.004; now it has risen to nearly $0.75, having increased nearly 200 times in just over a year.
Image source: Internet
Subsequently, Musk announced that he would use the funds raised from Dogecoin to launch a lunar satellite next year.
Image: Launching a lunar satellite with Dogecoin
Can Dogecoin really "launch satellites"? Of course! If you have enough low-cost Dogecoin, selling some can raise enough launch funds.
Musk is essentially saying, SpaceX holds a large amount of Dogecoin and has already raised quite a bit of money with it.
How much does it cost to launch a satellite to the moon? The retired NASA space shuttle LEO, which had lunar launch capability, had a launch cost of $450 million at that time. Now, including the satellite, the cost is estimated to be at least over $1 billion.
At a market price of $0.4 per Dogecoin, it would take approximately 2.5 billion Dogecoins to easily achieve this. The reason it is said to be "easily achievable" is that the total supply of Dogecoin is as high as 130 billion, with an additional stable increase of 5 billion each year. Moreover, Dogecoin holdings are very concentrated, with one address suspected to be controlled by Musk holding nearly 40 billion!
III. Musk is Winning the "War"
Through cryptocurrency, Musk has achieved financing freedom for Tesla and SpaceX.
So why attack Bitcoin and Dogecoin? Stop Tesla from accepting Bitcoin payments; call Dogecoin a scam?
This is also related to the "two wars."
Image source: Internet
When financing is needed, the market is in a bull market, making it easiest to offload and raise funds; when temporarily not needing financing, it is best to be in a bear market, otherwise, all the money in the market will be taken by speculators.
At the same time, overly promoting cryptocurrency will attract regulatory scrutiny—after Musk promoted Dogecoin, he was called in by regulators for a chat, and his Twitter was quiet for a while.
Therefore, using a half-joking, half-serious manner, contradicting his own statements and actions is the best way to leave regulators "speechless"—I made a joke, and that’s not allowed!?
Next time one of the eight companies controlled by Musk "needs money" or requires financing, Musk will likely stand up again to promote the cryptocurrency he holds.
This method of financing not only allows him to escape the control of financial capitalists and ridicule from regulators but also easily raises money, so why not?
Musk's fans are also happy to support him because, after he gets the money, unlike other "little masters" in the cryptocurrency world who buy luxury homes, drive luxury cars, and have a bunch of kids, he aims to change the fate of humanity and make humans an interstellar species. This inevitably makes other "little masters" start to question their lives and ponder: what should I do for humanity? The cryptocurrency world will see more "saviors" who want to change the fate of humanity, or at least the fate of others, because of Musk.
