Elon Musk, the Tesla billionaire who set out on a goal to turn Twitter into the X “everything app” last year, has been keeping a watch on a significant “PayPal update” that might destabilize the price of bitcoin and other cryptocurrencies.
Although cryptocurrency traders are prepared for a “crazy” September, the rise in the price of bitcoin has recently slowed, pushing down the price of other cryptocurrencies as well as Elon Musk’s “favorite” bitcoin rival, dogecoin, a meme-based clone of bitcoin made as a “joke.”
Now it has come to light that Musk has been “quietly” sponsoring the development of the dogecoin, despite the fact that the price of the cryptocurrency has fallen 90% from its all-time high, along with the price of bitcoin and other cryptocurrencies.
According to an excerpt from Musk biographer Walter Isaacson’s new book, simply titled Elon Musk, before purchasing Twitter last year for a staggering $44 billion, Musk considered building a new social media platform based on the blockchain that could have a payment system using dogecoin, the semi-serious cryptocurrency whose development he had been secretly funding.
Musk has previously stated that he wants to “upgrade” dogecoin to “beat bitcoin hands down” and “become the currency of Earth.” The extent of Musk’s funding or investment in dogecoin is unclear, though.
09/04 update: While Musk has been pouring money into the development of Dogecoin, venture capital funding for cryptocurrency firms has dropped to its lowest level in two years, according to statistics, plummeting to barely $500 million in August.
Tom Schmidt, managing partner at crypto VC company Dragonfly, told that he believes people confuse the ‘napkin math’ quantity of dry powder out there for a need and desire for VCs to deploy it in the same way they did in 2021 [and] 2022.
August’s reduction is the fourth consecutive month of declining crypto venture financing, as well as the lowest monthly volume total since January 2021.
Despite the crypto and broader VC collapse, certain high-profile businesses, such as crypto custodian BitGo, which raised $100 million in August, and Open AI-linked Worldcoin WLD 0.0% developer Tools For Humanity, which raised $115 million this year, have managed to secure big-ticket rounds.
In July, amid a flurry of interactions with dogecoin fan accounts, Musk, who has stated that he personally owns bitcoin, ethereum, and dogecoin, quietly added the dogecoin symbol to his X account. At the time, bitcoin and cryptocurrency market observers predicted Musk’s plans for X could be a true game-changer.
Dogecoin, which entered the top ten cryptocurrencies in 2021 as a result of a meme and influencer-driven rise, fell back during 2022 along with the price of bitcoin and other major cryptocurrencies, but it managed to hold onto some of its gains, increasing the value of the entire dogecoin network to almost $9 billion.
Musk is said to have been collaborating with Wall Street executives in recent months to transform X (Twitter) into a modernized version of PayPal and has recently been on a state money transmission license acquisition spree.
Musk, who has publicly expressed his support for the meme-based bitcoin rival dogecoin since 2018, has been known to be counselling dogecoin developers since 2019, according to a 2021 story, which stated that the core team of four engineers turned down Musk’s offer of investment.
Through his company’s Tesla and SpaceX, Musk was simultaneously purchasing significant sums of bitcoin. Early in 2021, Tesla invested $1.5 billion in bitcoin, emphasizing its long-term potential, but sold out 75% of that investment just over a year later as the business battled to post a quarterly profit.
Regarding Tesla’s selling of bitcoin at the time, Musk stated that this should not be interpreted as a judgement on bitcoin.
