Elon Musk has highlighted Bitcoin’s potential to protect investors from government money printing. His remarks follow growing speculation that public spending could rise as nations compete to develop artificial intelligence.

In a post on X, Musk pointed to Bitcoin’s proof-of-work system, describing it as an energy-based mechanism that prevents artificial value creation. He said that while governments can produce more fiat currency, “it is impossible to fake energy.”

AI Arms Race Boosts Bitcoin Demand

“That is why Bitcoin is based on energy: you can issue fake fiat currency, and every government in history has done so, but it is impossible to fake energy,” Musk wrote.

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Musk’s comments came in response to a post by market analyst Zerohedge, which described artificial intelligence as “the new global arms race.” The post suggested that governments, particularly in the United States and China, may fund AI expansion through public capital expenditure.

Zerohedge linked recent strength in Bitcoin , gold, and silver to what it called a “debasement to fund the AI arms race,” suggesting investors are turning to hard assets as a hedge against currency dilution.

Fiat, Inflation, and Blockchain Innovation

Cryptocurrencies were created to challenge centralised payment systems through blockchain technology, enabling faster and cheaper cross-border transfers without intermediary banks. Traditional systems like SWIFT remain slow and costly, while blockchain can settle transactions in minutes.

Bitcoin’s fixed supply of 21 million coins positions it as a hedge against inflation, unlike fiat currencies that governments can expand. This scarcity has driven adoption in inflation-hit economies such as Venezuela and Argentina.

However, Bitcoin’s volatility and scalability issues limit its use as a payment method. Regulators increasingly classify it as an asset, while central banks develop blockchain-based digital currencies to maintain control over monetary systems. This points to a future where digital fiats and cryptocurrencies coexist within global finance.