Elon Musk tweets his support for digital currencies in 'battle' between crypto and fiat money

Mr Musk's recent tweets have added to volatility in cryptocurrencies amid increased regulatory scrutiny

FILE PHOTO: Representations of the virtual currency Bitcoin and Ethereum stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
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Elon Musk is again tweeting about technology and cryptocurrencies, and this time he is clear on where his support is at.

In a thread started by Mr Musk himself comparing magic to technology where someone asked what he thought about people “who are angry at you because of crypto”, Tesla chief executive tweeted that the “true battle is between fiat & crypto. On balance, I support the latter”.

Bitcoin, the world's largest digital currency, rose after Mr Musk’s post. It is trading 5.24 per cent higher at $37,003.

Mr Musk has made similar comments before, including in December when he tweeted that Bitcoin is almost as bad as fiat money. In February, he elaborated to say that “when fiat currency has negative real interest, only a fool wouldn’t look elsewhere”.

Former US Treasury Secretary Lawrence H. Summers recently compared cryptocurrencies to gold as a safe haven asset, but said he does not expect consumers to turn to Bitcoin for most of their payments, even though it could become an important part of e-commerce.

Earlier in the week, Mr Musk had tweeted that he would not be selling any Dogecoin and he also posted a cryptic image of a dollar bill with a Shiba Inu dog replacing the face of a former US president.

Bitcoin ended the week in volatile territory after a new warning from Chinese officials over cracking down on cryptocurrencies. The earlier sell-off on Friday hit Bitcoin believers still fuming after Mr Musk did an about-face and criticised the token for its energy usage.