Support cryptocurrencies in battle against fiat currencies: Elon Musk

Tesla CEO Elon Musk on Saturday again wade into the debate about cryptocurrencies, saying he supports cryptocurrencies in the battle against fiat currencies.

Musk tweeted about magic and technology, and in reply to a question about people angry with him because of cryptocurrency, he said, "The true battle is between fiat & crypto. On balance, I support the latter."

The true battle is between fiat & crypto. On balance, I support the latter.

- Elon Musk (@elonmusk) May 22, 2021

Bitcoin rose after Musk's tweet and was trading at $38,279.16.

Also read: Cryptocurrency market crashes! Is it time to sell Bitcoin?

Musk has been a supporter of cryptocurrency. However, his tweets about cryptocurrencies being "energy-intensive" and not environment friendly led to a rout in the digital currencies. Earlier this week, Bitcoin fell to below $32,000 mark, before staging a recovery.

Besides, Musk's announcement that Tesla will no longer accept Bitcoins, and China's action on the crypto front also led to the fall in cryptocurrencies.

China proscribed financial institutions and payment companies from providing services related to cryptocurrency transactions and warned investors against speculative crypto trading.

On Thursday, US Federal Reserve chief Jerome Powell also turned up the heat on cryptocurrencies, saying they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted.

The Treasury Department, meanwhile, flagged its concerns that wealthy individuals could use the largely unregulated sector to avoid tax and said it wanted big crypto-asset transfers reported to authorities.

Also read: Challenging times for Bitcoin, cryptocurrencies ahead as US Fed signals stricter regulations