Elon Musk Says Bitcoin Is Not a Good Transaction Currency, Bitcoin Dips Over 8%

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In a dramatic turn for the cryptocurrency market, Bitcoin plunged more than 8% on the 13th, briefly touching a session low near $45,773 — a sharp decline that brought it close to its lowest level in months. As of 9:05 a.m. Taipei time on the 14th, Bitcoin was trading at $46,935.42, down $106.47 (0.23%) from the previous close. This drop follows comments from Elon Musk, CEO of Tesla and SpaceX, who questioned Bitcoin’s utility as a transactional currency despite his known support for digital assets.

From its all-time high of $68,991.85 on November 10, Bitcoin has now fallen nearly 39%, shedding over $26,000 in value within just one month. The correction has sent shockwaves across the broader crypto market, with the Galaxy Crypto Index tumbling 6.3% to its lowest level since early October. Alternative cryptocurrencies such as Solana, Cardano, and Polkadot saw even steeper declines, underscoring investor caution amid growing macroeconomic uncertainty.

Musk’s Stance: Bitcoin vs. Dogecoin

Elon Musk, named Time magazine's Person of the Year in 2021 for his outsized influence on markets and culture, has long been a polarizing figure in the crypto space. While he has invested in Bitcoin, Ethereum, and Dogecoin, his latest remarks spotlight a clear preference for the latter — especially when it comes to everyday transactions.

“Fundamentally, Bitcoin is not a good alternative to transactional currency,” Musk stated. “Even though Dogecoin was originally created as a joke, it’s actually better suited for transactions. Bitcoin has low transaction throughput and high fees per transaction. It’s more appropriate as a store of value — which is why people want to hold it rather than sell or spend it.”

Musk emphasized that Dogecoin was designed with spending in mind — a "currency that encourages consumption rather than hoarding." This philosophy aligns with his vision of making digital payments faster, cheaper, and more accessible globally.

His comments carry significant weight due to what Time described as his “market-moving” influence — a single tweet or public statement can trigger massive price swings across crypto markets. Investors and traders continue to monitor his social media activity closely for signals about future crypto trends.

Why Bitcoin Struggles as a Transaction Medium

Despite being the first and most well-known cryptocurrency, Bitcoin faces inherent limitations when used for daily transactions:

These factors make Bitcoin more suitable as a digital gold — a long-term store of value — rather than a medium of exchange. In contrast, cryptocurrencies like Dogecoin and Litecoin offer faster confirmation times and lower fees, making them more practical for point-of-sale purchases or peer-to-peer transfers.

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Market Reaction and Broader Crypto Impact

The sell-off triggered by Musk’s remarks wasn’t isolated to Bitcoin. The entire crypto ecosystem felt the ripple effects:

Nonetheless, some analysts argue this correction could be healthy in the long run. A pullback from unsustainable highs may allow for consolidation and renewed institutional interest later in the year.

Institutional Outlook: Store of Value vs. Digital Cash

While retail investors often debate whether crypto should function as money or an investment asset, institutional players increasingly view Bitcoin through the lens of digital gold.

Firms like MicroStrategy and Tesla have added Bitcoin to their balance sheets as a hedge against inflation and currency devaluation. This adoption reinforces the idea that Bitcoin's primary role is wealth preservation — not daily spending.

Meanwhile, newer Layer 1 blockchains and stablecoins are stepping up to fill the transactional gap. Projects focused on scalability, interoperability, and low-cost transfers are gaining traction as viable alternatives for global payments.

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Frequently Asked Questions (FAQ)

Q: Why did Bitcoin drop over 8% suddenly?
A: The sharp decline followed Elon Musk’s public statement questioning Bitcoin’s effectiveness as a transaction currency. Given his influence in both tech and financial markets, such comments often trigger immediate sell-offs.

Q: Is Bitcoin still a good investment if it’s not good for transactions?
A: Yes. Many investors see Bitcoin as a long-term store of value — similar to gold — rather than a spending tool. Its limited supply (capped at 21 million coins) supports its deflationary nature and potential for appreciation.

Q: What makes Dogecoin better for transactions than Bitcoin?
A: Dogecoin offers faster block times (about one minute vs. Bitcoin’s ten), lower fees, and higher throughput. These technical advantages make it more practical for small payments and frequent usage.

Q: Can Bitcoin ever become efficient for daily transactions?
A: With innovations like the Lightning Network — a second-layer solution — Bitcoin can support faster micropayments off-chain. However, widespread adoption depends on user experience improvements and merchant integration.

Q: Should I sell my Bitcoin after this crash?
A: Investment decisions should align with your financial goals and risk tolerance. Short-term volatility is common in crypto markets; holding through dips may benefit long-term investors if fundamentals remain strong.

Q: Where can I securely trade or store cryptocurrencies?
A: Choose regulated platforms with strong security protocols, cold storage options, and transparent auditing practices to protect your assets.

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