The most successful cryptocurrency so far ‘Bitcoin’ might have gotten the biggest backing since its launch. Electric car company Tesla has just invested 1.5 billion dollars in Bitcoin, making it the biggest investment. Corporation also declared that the purchase of Bitcoin was made after a major switch in the company’s investment policy. The new investment policy permits more elasticity so the profit and returns can be maximum, unlike their previous policy which only dealt with cash. The use of cryptocurrency will allow Tesla to explore the market extensively. This announcement was made by Tesla in the second week of February.
Businesses buying Bitcoins
Tesla is the first company to reach the S&P 500 position in the stock market. So, Tesla investing in Bitcoin gives this always at a volatile stage crypto currency an ultimate strength. A payment company named Square made a purchase of around 5 thousand Bitcoins at the price of 50 million dollars in October 2020. Another company (MSTR) Business intelligence platform MicroStrategy absorbed 1.3 billion dollars of its cash assets in Bitcoins. MSTR also had to make changes in their finance management. At that point MSTR was heavily criticised for this investment but eventually MSTR’s stocks price went really high despite having no physical changes in the business. This might have encouraged Tesla to buy Bitcoins because they were already considering cryptocurrency.
Stock market and other businesses have had a close eye on this matter of big business tycoons taking the risk of buying something like Bitcoin. The ever-increasing value of Bitcoin might eventually make it a credible source of transaction in coming years.
Elon Musk’s Old Interest in Bitcoins
Tesla had been showing interest in Bitcoins for quite some time now. The owner of Tesla Elon Musk has been very vocal about his interest in Bitcoins on different social media platforms. In the end of January, Musk added ‘#bitcoin’ to his twitter bio giving a hint. People did assume for some time that Musk might be joking around with the topic of cryptocurrency. At another time Musk said that he feels he is already late to the Bitcoin party. Tesla took 2 more weeks to announce after Elon Musk made changes into bio.
Elon Musk is one of those people who are seeing cryptocurrency as the future of trade. This move by Tesla does not come as a big surprise given Musk’s already shown interest in it.
Tesla for Bitcoin
Yes that’s right, in future you can buy a Tesla for Bitcoins. Tesla has made this announcement that soon they will be accepting Bitcoin in payment for the cars. To make it possible they have to go through a legal process, so initially it would be on a limited scale. Making it fully functional might take some more time.
The thought of using cryptocurrency for shopping seemed like a far fetched idea a while ago but Tesla is making it happen. In only a decade Bitcoin has reached this height of success, regardless of the variability of it. As mentioned before Tesla is the first S&P company to make an investment of 1.5 billion dollars in any cryptocurrency. Making the shopping of one of the most expensive cars of the world possible with cryptocurrency will be a huge milestone for Tesla itself.
Future of Tesla with Bitcoin
2020 has been a thriving year for bitcoin but there has always been a uncertainty in the market around cryptocurrency. People did see it as a bubble which can burst at any time. Since the announcement, the market has been discussing this decision by Tesla and what future this investment holds. News reports have been calling it ‘Tesla and Musk diving into the world of cryptocurrency and Bitcoin’. Regardless of the uncertainty, other big names in business have also started to look in their assets in order to invest in Bitcoins. So, Tesla has started the race of virtual assets.
Bitcoin has a reputation of being volatile, also everybody knows it is used for shady businesses too, people buy drugs and it is used for money laundering. Tesla entering into the scene of specifically Bitcoins and crypto in general raises the credibility of Bitcoins. The news of Tesla investing in bitcoins made its price skyrocket to 44000 dollars per bitcoin. This is the all time high price of Bitcoin
The constantly rising price of Bitcoin is expected to bring stability to the world’s general sense of business through crypto. There will be a cyber security system used to ensure the security of use of Bitcoins in Tesla’s finances.
Public Response to Investment
Elon Musk and Tesla hold a special position in the word of trade. Elon Musk’s SpaceX mission makes him famous even amongst the people who have nothing to do with trade. This reputation naturally brought response from the public. As Elon Musk was just listed as the richest man on earth, some people are calling it just an attention seeking tact. Then there are people who think Musk’s move was important to make cryptocurrency trustworthy. Anything done by Elon Musk does bring the world’s focus to that particular thing. Elon Musk is a trend setter.
Bitcoin the future of Shopping
As mentioned before, Bitcoin and other cryptocurrencies seem like the future of shopping. With Tesla trying hard to make the use of Bitcoin possible for the purchase of their cars, cryptocurrency might become a mode of payment much earlier than we thought. There are new minors coming into the scene every day. Bitcoin limit which was set to be 21 million bitcoins, which was to be achieved by 2040. The demand of Bitcoins is increasing every day and 18.5 million Bitcoins have already been mined.
Tesla has already given an indication of making more investments in Bitcoin. By getting into Bitcoin trade Tesla has changed the way conventional businesses were seen. Tesla is a pioneer of so many new trends in the world of business, Bitcoin is one of those trends.