Elon Musk’s Renewed Interest in Crypto Following Dogecoin Lawsuit Win

Tesla CEO Elon Musk is once again expressing interest in Dogecoin as a potential payment method for Tesla merchandise. His recent remarks, made on the social media platform X, mark some of the few public statements he’s made on the cryptocurrency since the market downturn triggered by the Federal Reserve’s interest rate hikes. During the pandemic, Musk emerged as a vocal supporter of both Bitcoin and Dogecoin, even going so far as to have his space company, SpaceX, accept Dogecoin for a planned mission to the Moon, which has yet to materialize.

Musk Hints at Reintroducing Dogecoin for Tesla Purchases

Musk’s latest comments come on the heels of a significant legal victory. In June last year, investors filed a lawsuit against him, accusing him of insider trading and market manipulation related to Dogecoin. They alleged that Musk artificially inflated Dogecoin’s value through various actions, such as his posts on X and television appearances, ultimately selling $124 million worth of Dogecoin after temporarily changing Twitter’s logo to Dogecoin’s symbol. This move caused a 30% surge in Dogecoin’s price, which the plaintiffs argued was evidence of market manipulation.

However, U.S. District Judge Alvin Hellerstein dismissed these claims, stating that Musk’s actions did not constitute insider trading or market manipulation. Now, free from the legal cloud, Musk has suggested bringing back Dogecoin as a payment option on Tesla’s website, although it remains uncertain whether Tesla will adopt this policy again.

Tesla’s Stronger Commitment to Bitcoin

While Tesla has dabbled with Dogecoin, its investment in Bitcoin has been more substantial. In February 2021, the company purchased $1.5 billion worth of Bitcoin, averaging around $38,000 per coin. Despite a 64% drop in Bitcoin’s value between March 2021 and December 2022, the cryptocurrency has since rebounded, with market conditions favoring its recovery as the Federal Reserve signals a potential easing of its monetary policy.

Tesla’s SEC filings, while not directly mentioning Bitcoin, reveal significant holdings in digital assets. These are reported at a carrying value of $182 million in the first half of 2024, although the fair value dropped from $821 million in April to $722 million by the end of the second quarter. Despite selling three-quarters of its Bitcoin holdings in Q2 2022, Tesla has seen the remaining Bitcoin appreciate by a strong 175%.

Dogecoin’s Potential Resurgence

Dogecoin experienced a 20% price increase in May after Tesla quietly updated its website to indicate that some products could be purchased with Dogecoin. During a visit to Germany in March, Musk also hinted at the possibility of allowing Tesla vehicles to be purchased with Dogecoin in the future.