Elon Musk Endorses Bitcoin as Inflation Shield Amid Government AI Spending Surge

Cointelegraph reports that Elon Musk praised Bitcoin on Tuesday, October 15, in his first serious public comment about the cryptocurrency in nearly three years. The Tesla CEO responded to analyst Zerohedge's post connecting Bitcoin momentum to government spending on artificial intelligence development. Musk wrote that Bitcoin is based on energy because governments can issue fake fiat currency, but it is impossible to fake energy. The statement came as Zerohedge attributed recent Bitcoin and precious metals performance to currency debasement needed to fund the AI arms race between major economies.

Musk last commented on Bitcoin in November 2022, when he predicted a long winter for the asset following the FTX collapse. At that time, Bitcoin had fallen to $16,000 during the bear market. The FTX exchange filed for bankruptcy on November 11, 2022, after misappropriating $8.9 billion in customer funds.

Why Government AI Spending Affects Bitcoin Value

Global AI investment is projected to reach $375 billion in 2025 and exceed $500 billion by 2026, according to CNBC. This massive spending wave requires significant government funding. A September 2025 Deutsche Bank analysis suggested that without AI-related investment, the US economy might already be in recession. Tech companies are issuing debt to finance infrastructure expansion. The scale of required spending raises questions about currency debasement through monetary expansion.

Bitcoin holders view this environment as validation of the cryptocurrency's fixed supply model. We previously reported that 15 US states are moving forward with plans for Bitcoin reserves, with Pennsylvania, Arizona, and New Hampshire proposing allocations up to 10% of public funds. Supporters cite portfolio diversification and inflation protection as key benefits. States are reconsidering how they store wealth, particularly given potential reductions in federal spending on state initiatives.

Institutional Response to Currency Concerns

The connection between AI spending and Bitcoin adoption reflects broader institutional trends. Technology companies are competing to build massive data centers across Texas, Virginia, and Georgia to house advanced processors. This infrastructure buildout represents what analysts call trillions being spent in the fourth industrial revolution. The spending occurs as central banks maintain expansionary monetary policies.

Bitcoin's proof-of-work model ties its creation directly to energy expenditure. This mechanism prevents arbitrary supply increases that characterize fiat currencies. Mining now uses over 55% sustainable energy according to data from climate tech venture capitalist Daniel Batten and Bitcoin analyst Willy Woo. This improvement addresses previous environmental concerns that led Tesla to suspend Bitcoin payments in May 2021.

Critics maintain concerns about Bitcoin volatility. David Krause, a finance professor at Marquette University, describes Bitcoin as the most volatile asset class he has seen. The tension between inflation protection advocates and volatility critics continues as governments evaluate reserve strategies. Musk has not commented on whether Tesla will resume accepting Bitcoin payments. The company pledged in June 2021 to allow Bitcoin transactions once mining network use of renewable energy reached 50%.