The Tesla and SpaceX CEO also said he has no plans to sell any of his bitcoin anytime soon.
"If the price of bitcoin goes down, I lose money. I might pump, but I don't dump. I definitely do not believe in getting the price high and selling or anything like that," Musk said. "I would like to see bitcoin succeed."
Though experts warn that cryptocurrency is a risky, speculative investment, if you own or are going to buy bitcoin, other experts agree that Musk's long-term holding strategy may be the best practice.
Before deciding to invest in bitcoin, or any other cryptocurrency, you should first learn about and understand the risks involved.
"For someone new, it's important for them to still understand that it's a very volatile asset class," Anjali Jariwala, certified financial planner, certified public accountant and founder of Fit Advisors, tells CNBC Make It. "You have to be comfortable with the swings and you have to be comfortable also losing your money."
The crypto space is still widely unregulated and not entirely mainstream, so when investing, "you have to make sure that it's money that you can really afford to lose," she says.
Then, if you ultimately decide to invest in bitcoin, experts recommend sticking with a long-term strategy rather than attempting to trade in the short-term.
"That is definitely the best strategy if you are going to own bitcoin," Amy Arnott, a portfolio strategist at Morningstar, tells CNBC Make It. "The problem with trying to trade based on daily or weekly price moves is it's so volatile that you could easily get whipsawed." She recommends planning to hold for at least 10 years.
Transaction costs for cryptocurrency can be relatively high, so buying and holding can be beneficial in that regard as well, Arnott says.
Jariwala agrees. "In order to take away some of the stress and anxiety around the huge price fluctuations, a better approach is to view [bitcoin] as something that you're gonna hold on to for a while," she says.
Though it may be tempting to trade alongside social media buzz, experts warn against it. "You want to have an approach that you can stick with consistently and an approach where you don't have to constantly be watching the market or watching your Coinbase account to make your investment decisions," Jariwala explains.
It's also important to diversify beyond cryptocurrency and limit it to a relatively small portion of your portfolio.
When her clients express interest in investing in cryptocurrency, Jariwala first assesses how much "extra money" they have available. "My rule of thumb is no more than 3% of your overall allocation in this asset class," she says.
"I would be less worried about diversification in that [crypto] portfolio, because to me, the crypto account is essentially their play account," Jariwala says. "We've allocated a portion of their portfolio that even if that account goes to zero, it's not going to impact the other financial goals that they set because we're appropriately saving and investing for those buckets elsewhere."
Like Jariwala, Arnott also recommends keeping bitcoin to a relatively small percentage of your portfolio. "It's such a volatile asset that even if you add a very small percentage to your portfolio, it can dramatically increase your portfolio's risk profile and potential drawdowns," she says.
Once you've determined how much you'd be comfortable allocating to bitcoin, don't feel rushed to spend it all at once. Start by buying a little at a time.
That way, "if there is a big dip that happens, you'd have some funds available that you can still put there," Jariwala says.
"Just like any other investment, you can't see what the true value or performance is until you have some time on that investment," she continues. "If it's something that you've held for five or 10 years, you really are going to see what the impact is and what its consistent performance is."