Cryptocurrency vs Fiat currency
Cryptocurrency is a digital asset whose value tied closely to the derivatives from its blockchain. The best example for a cryptocurrency is Bitcoin. Fiat currencies are the currencies which is legal money whose value is tied with the government and are also called government-issued currency. The governance of both the currencies is different to one another. While blockchains, communities determine the value and govern the cryptocurrencies and central banks under the supervision of the government look after the governance of fiat currencies. Cryptocurrency works in a decentralized system and fiat currency works in a more efficient centralized order. In both the currencies its crucial to understand that, their values are changing consistently due to various influencing factors in the market.
Elon musk and his history with cryptocurrency.
Elon Musk, the CEO of Tesla, has been keenly involved in developing the crypto market. Previously, he went on to accept the use of bitcoins in his company Tesla to complete the transactions. After a short boost to the cryptocurrency, he then abolished the use of bitcoins for completing the payments. Similarly, after the last week’s market crash many people believed that Elon Musk might take some kind of constructive action to revive the market and their prediction didn’t go wrong.
Let’s see his tweet below.
The true battle is between fiat & crypto. On balance, I support the latter.
— Elon Musk (@elonmusk) May 22, 2021
From the tweet which he made on Saturday, it can be safely concluded that Tesla’s CEO prefers crypto currency over fiat currency. His tweet also helped bitcoin to spike up a little bit to $38,370 after the disastrous fall from approx. $60,000 to less than $30,000 amidst the crypto market crash. He also went on to make a comment that he wont be selling the dogecoins, which helped the meme coin to go up by at least 15%.
Musk’s influence on crypto market.
Elon Musk’s influence in the crypto market has been huge. In crypto world, a special term called “Elon Musk” effect also has a large amount of popularity. Elon Musks tweets about crypto, investments in crypto directly impact the market positively. The prices of the currencies rise up and touch their peaks in no time, thanks to Elon Musk.
It should be noted that, cryptocurrencies are mined and there is a common belief that it harms the environment while fiat currencies are the legal currencies governed by government. It is true that cryptocurrencies is growing in popularity and has a high chance of making a revolution in the finance sector, the government has to factor out the risks of using cryptocurrencies over fiat currencies and come up with necessary plan of action to facilitate cryptocurrencies.