Bitcoin, it seemed, was finally ready for prime time. Prices were surging, big payments firms were accepting it, and billionaires such as Paul Tudor Jones and Stanley Druckenmiler were endorsing it as an investment.
But now that Tesla CEO Elon Musk is signaling that he's suddenly wary of the cryptocurrency, what will that mean for the rest of Corporate America?
The surprisingly negative comments from Musk about the massive amount of energy required to mine bitcoin come after Tesla bought $1.5 billion of the cryptocurrency for its corporate balance sheet — and also after Musk has been busy hyping the value of the meme-driven crypto dogecoin.
The price of bitcoin, dogecoin and other top cryptos ethereum, binance and litecoin, have been in freefall for the past week or so. Musk first tanked the market when he went on "Saturday Night Live" on May 8 and joked about cryptos, even calling dogecoin a "hustle."
But Musk's recent declaration that Tesla would no longer accept bitcoin as payment for its cars due to the crypto's massive carbon footprint, as well as a series of confusing and somewhat contradictory tweets about the company's bitcoin holdings, has the investment world up in arms.
Bitcoin still has many fans
The comments come just as several prominent companies have started to embrace bitcoin. Square and Venmo owner PayPal are working to streamline bitcoin payments on their networks. Big Data firm Palantir, Visa and Starbucks are among the more well-known firms that have touted bitcoin lately as well.
Palantir chief financial officer David Glazer said on an earnings call earlier this month that the company has discussed the possibility of adding bitcoin to its balance sheet and was "open for business'" with regards to accepting the crypto as payment from customers.
"We still see other companies coming in and investing in bitcoin because they view it as a store of value, a digital gold," said Stephen Kelso, head of markets at ITI Capital, in an interview with CNN Business.
Kelso said bitcoin is still viewed by investors and corporations as a way to hedge against inflation.
Along those lines, software firm MicroStrategy, which like Tesla holds bitcoin on its balance sheet, has bought even more of the cryptocurrency in recent days. But MicroStrategy's stock fell 7% on Monday and has plunged nearly 20% in the past week as bitcoin prices have tumbled.
Still too volatile for many in Corporate America?
Bitcoin's breakneck volatility continues to be a major concern. It may be one thing for a company to keep a small amount of crypto on its balance sheet as a sexier alternative to cash and Treasury bonds in hopes of better returns.
But can mainstream firms — particularly those with big consumer businesses — really risk allowing customers to buy and sell goods with a currency that is so volatile? Probably not.
"For cryptocurrencies to become widespread and embedded, some stability is necessary," said Danyaal Rashid, thematic analyst at GlobalData, in a report Monday.
"This is certainly the case if people expect to make payments with crypto. If we anticipate week-on-week price swings of up to 20%, payments become infeasible," Rashid added.
So it's no wonder that Colgate-Palmoliv CEO Noel Wallace simply said, "No, we don't," when asked at the recent annual shareholder meeting if the company has a plan for using bitcoin for any business transactions.
And Tesla rival Volkswagen isn't bullish on bitcoin either. VW chief financial officer Arno Antlitz said on the automaker's latest earnings call that "we have currently no plans to use cryptocurrencies or invest in cryptocurrencies."
Even so, there is legitimate interest in cryptos on the part of investors. And a lot of that — for better or for worse — may be due to Musk.
"It's a strange phenomenon when your risk committee has to seriously discuss SNL. But I think it helps bring more investors into the fray," said Michael Kamerman, CEO of Skilling, a retail brokerage firm that focuses on cryptocurrencies.
Kamerman said he thinks that there will be an eventual shakeout in the cryptocurrency market. There are simply too many of them right now.
Just as Amazon shares plunged when the dot.com bubble burst more than twenty years ago before eventually rebounding, the same may happen with bitcoin and other leading cryptos.
"The dust has to settle, but we're on to something with cryptos that is similar to the late 1990s and e-commerce," Kamerman said.
Other experts say that investors have to get used to the volatility. The crypto world moves a lot more quickly than stocks, bonds and traditional currencies.
But this too shall pass as the industry starts to mature.
"A lot of bitcoin investors still take their cues from Musk. It will be awhile before we're completely insulated from that," said Ben Weiss, CEO of CoinFlip, a crypto ATM company. "But bitcoin is stronger than one company and one person."