“This is why I said bitcoin is based on energy,” Musk said in an interview with Nikhil Kamath. “You can’t legislate energy.”

In October, Musk posted to X that “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,” and agreeing that the “global arms race” toward artificial intelligence is the reason why gold, silver and bitcoin have all seen their prices soar in recent years.

Bitcoin, which is secured by a network of so-called miners who use powerful computers to validate transactions in return for newly issued bitcoin, uses as much electricity each year as some small countries, with its energy demands climbing along with its price as more miners join the network.

In recent months, the “debasement trade” betting against traditional currencies like the dollar and betting on “hard” assets like gold, silver and bitcoin has taken off, with traders pushing gold, silver and the bitcoin price to record highs.

Disquiet over so-called fiat currencies has grow in the years following the huge 2008 financial crisis bailouts that directly led to the creation of bitcoin and then Covid lockdown stimulus measures that flooded the economy with trillions of freshly printed dollars.

Government stimulus and supply chain disrupting lockdowns sparked massive global inflation, which some fear has put the U.S. dollar into “death spiral” as the Federal Reserve is forced to create more dollars to pay off interest on its existing debt.

“The U.S. is increasing money supply quite substantially with deficits that are in the order of $2 trillion,” Musk told Kamath, predicting AI advances in three years will increase the output of goods and services enough to drive the economy into deflation.

“In three years or less, my guess is goods and services output will exceed the rate of inflation,” Musk said. “Maybe after those three years, you have deflation and then interest rates go to zero and then the debt is a smaller problem than it is.”

Musk, who helped Trump back into the White House with campaign rallies and warnings over the spiraling U.S. debt pile that has now passed $38 trillion, dramatically fell out with U.S. president Donald Trump after he failed to rein in government spending, while Musk’s own department of government efficiency (Doge) initiative has so far failed to make the multi-trillion dollar savings it originally promised.

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Musk’s support for bitcoin and crypto has waned from its Covid-era peak, though Musk has continued to give backing to bitcoin, as well as his “favorite” cryptocurrency dogecoin.

Following his White House exit, Musk said his America Party would favor bitcoin over the U.S. dollar, with Musk branding the dollar and other non-asset backed currencies as “hopeless.”

This week, the bitcoin price has fallen sharply even as gold and silver have climbed, though analysts are divided over whether bitcoin will catch up.

“Quite why silver and gold are surging when bitcoin is struggling is another matter,” AJ Bell investment director Russ Mould said in emailed comments.

“Adherents of cryptocurrencies argue they are every bit as much a haven asset as precious metals, and thus an equally effective source of protection against debt accumulation and currency debasement, thanks to how their supply is finite, at least when it comes to bitcoin. But crypto’s performance as an asset class generally seems to be more ‘risk on’ than ‘risk off’ and bitcoin’s latest bout of marked weakness is coinciding with a pause in U.S. equities’ relentless march higher and the first signs of some doubts over AI stocks and whether their valuations and spending plans can be truly justified.”