KEY POINTS

  • Musk has been named the Time Person of the Year
  • He believes BTC is a store of value and cannot replace fiat money
  • He thinks Dogecoin is a better mode of payment than BTC

Elon Musk used his interview with Time magazine, which named him the Person of the Year, to talk up Dogecoin and explained that he loves cryptos because they cannot be "diluted" by governments like fiat currency can be — but added that cryptos cannot replace fiat.

Musk has been known to send waves of excitement coursing through the cryptocurrency market with just a couple of tweets. In an interview with Time on Monday, Musk said he doesn't believe Bitcoin can replace traditional modes of payment, i.e., fiat currencies. However, he said BTC is, "at least at its base level, suitable for maybe a store of value." He said the low transactional volumes and high fees required for verification ruled out the possibility of Bitcoin being used for transactions.

Musk is also known as "the Dogefather" in the crypto community and for his support for Dogecoin, a dog meme-based cryptocurrency was created as a joke. In contrast to his views on Bitcoin, Musk believes that Dogecoin is a very promising method of payment.

“Even though it was created as a silly joke, Dogecoin is better suited for transactions. The total transaction flow that you do with Dogecoin is … transactions per day has much higher potential than Bitcoin."

"It is slightly inflationary but that inflationary number is a fixed number as opposed to a percentage,” he said. “That means over time its percentage inflation actually decreases and that’s actually good because it encourages people to spend rather than sort of hoard it as a store of value."

As of 1:47 a.m. ET, Bitcoin was down 5.2% at $46,519 and Dogecoin was down 5.6% at $0.1559, CoinmarketCap data showed.

The richest person in the world, who holds three times the wealth of legendary investor Warren Buffett, has inspired a number of cryptocurrencies and Musk said in July that Tesla owns Bitcoin.  Musk also personally owns Bitcoin, Ethereum and Dogecoin, he revealed in the B-word Conference earlier this year.

But he said he is not a hater of fiat currency as many crypto enthusiasts are. "I’m not a huge hater of fiat currency like many in the crypto­world are. But there are advantages with crypto relative to fiat in that fiat currency tends to get diluted by whatever government it is," he said, adding fiat currency "ends up being a pernicious tax on people, especially those who have cash savings with dilution of the money supply."

Musk was the CEO of PayPal during its initial days of merger with X.com, an online financial services firm in 1999. "I played a significant role in creating Paypal so my understanding of the money system at a fundamental level, how it actually works, the detailed mechanics of it — I think there’re very few people that understand it better than me,” he said.

Finally, musk talked about Facebook, now Meta, and said that he is concerned about the company's equity policy, which enables Mark Zuckerberg’s "great-great-­grandchildren will still control the company."

"Share structures that give super-voting rights should be removed,” Musk said.

Elon Musk Elon Musk is pictured in September 2020. Photo: AFP / Odd ANDERSEN