09/04 update below. This post was originally published on September 03

Elon Musk, the Tesla TSLA billionaire who embarked on a mission to transform Twitter into the X "everything app" last year, has been eyeing a major "PayPal update" that could cause bitcoin and crypto price chaos.

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The bitcoin price rally this year has stalled in recent weeks—though crypto traders are braced for a "crazy" September—dragging down crypto prices and Elon Musk's "fav" bitcoin rival dogecoin, a meme-based fork of bitcoin created as a "joke."

Now, Musk has been revealed to have been "quietly" funding dogecoin development—even as the dogecoin price has collapsed 90% from its all-time high, crashing along with bitcoin and other cryptocurrencies.

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Before buying Twitter last year for an eye-watering $44 billion, Musk considered creating "a new social-media platform based on the blockchain" that "could have a payment system using dogecoin, the semi-serious cryptocurrency whose development he had been quietly funding," Musk biographer Walter Isaacson wrote in an excerpt of his new book, titled simply Elon Musk, published in the Wall Street Journal.

The level of Musk's funding or investment in dogecoin isn't clear but he has previously said he wants to "upgrade" dogecoin to "beat bitcoin hands down" and "become the currency of Earth."

09/04 update: While Musk has been pouring cash into dogecoin development, venture capital funding for crypto companies has slumped to its lowest level in two years, according to data from The Block Research, falling to just $500 million in August.

"I think people mistake the 'napkin math' amount of dry powder out there for a need and desire for VCs to deploy that the same way they did in 2021 [and] 2022," Tom Schmidt, managing partner at crypto VC firm Dragonfly, told The Block.

August's decline is the fourth consecutive month of dropping crypto venture funding and the lowest monthly volume figure recorded since January 2021.

Despite the crypto and broader VC slump, some high-profile companies have managed to raise big-ticket rounds, including crypto custodian BitGo, which raised $100 million in August, and Open AI-linked Worldcoin WLD developer Tools For Humanity, which raised $115 million this year.

In July, Musk, who has said he personally owns the cryptocurrencies bitcoin, ethereum and dogecoin, quietly added the dogecoin Ð symbol to his X account amid a flurry of interactions with dogecoin fan accounts—with bitcoin and crypto market watchers predicting Musk's plans for X could be an "absolute game-changer."

Dogecoin DOGE , which rocketed into the crypto top ten in 2021 alongside a meme and influencer-fueled rally, crashed back along with the bitcoin price and other major cryptocurrencies through 2022 but has held onto some of its gains, making the combined dogecoin network worth around $9 billion.

In recent months, Musk has reportedly been plotting with Wall Street executives to turn X (Twitter) into an "updated version of PayPal PYPL ," and has recently been on a state money transmitting license acquiring spree.

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Musk, who has been posting his support for the meme-based bitcoin rival dogecoin since 2018, had been known to be advising dogecoin developers since 2019, according to a 2021 Decrypt report that said the core team of four developers declined Musk's offer of funding.

At the same time, Musk had been buying huge amounts of bitcoin via his company's Tesla and SpaceX. In early 2021, Tesla bought $1.5 billion worth of bitcoin, citing its "long-term potential," but cashed out 75% of that just over a year later as the company struggled to book a quarterly profit.

"This should be not taken as some verdict on bitcoin," Musk said of Tesla's bitcoin sale at the time.