I know, everyone is talking about it.
On February 8, 2021, the value of Bitcoin soared, touching a new All Time High of a whopping $44,795, and it looks like it won't stop anytime soon. This is due to the huge purchase by Tesla, which has invested $1.5 billion in the world's most famous digital currency.
This article is meant to show you why Tesla bought BTC and how Elon Musk is influencing the market.
Introduction
Bitcoin continues to amaze everyone. After December's rally, the cryptocurrency is seeing a further rise that, this time, has taken it to over $45,000. In this case, it is all the work of Tesla Inc. which, as already decided in January 2021, bought Bitcoin for $1.5 billion. Moreover, the company stated within the SEC Annual Report that it will start accepting digital currencies as a new form of payment.
Tesla, Elon Musk & Bitcoin
For some time now, we've been talking about Elon Musk and his love, besides cars, for digital financial instruments such as Bitcoin. Recently, there have been many episodes that have seen him as the protagonist of unusual movements within the market. First with the suggestion to switch from Whatsapp to Signal, then with puns like "Gamestonk" or "Who let the Doge out" posted on Twitter, and now with the hashtag #bitcoin in the profile bio.
It seems that the famous entrepreneur is having fun giving signals to his audience and, even if many were skeptical about buying or not buying what he was suggesting, those who bought have seen their portfolios grow exponentially. Today it was the turn of Bitcoin which, following Tesla's purchase of $1.5 billion, flew from $38,000 to over $45,000 in the space of a day.
The purchase was already slated for January 2021, as written within the SEC's Annual Report, which also details future plans related to buying and selling financial assets.
SEC Annual Report
Within the Annual Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934 For The Fiscal Year Ended December 31, 2020 published on February 8, Tesla had already planned to purchase $1.5 billion worth of Bitcoin, stating that its intent is to start accepting Bitcoin as a form of payment for its products as soon as possible, albeit initially on a limited basis.
Not only has this movement benefited the wallets of many coin HODLers, but it represents a real breakthrough in the mass-adoption of digital currencies. Lately, in fact, it's not only companies like Tesla that are considering cryptocurrencies, but also banks and electronic payment giants like Visa.
According to some, this operation that has shaken the entire market had already been foreshadowed by Elon Musk's request on Twitter about the possibility of making large transactions at once in December. Also in this case, those who saw it long could take advantage of a huge rise in the currency. Tesla, moreover, confirmed that the purchase would be made to provide itself with greater flexibility by diversifying and maximizing returns:
"In January 2021, we updated our investment policy to provide us with greater flexibility to diversify and maximize the returns on our cash [...] we may invest a portion of that cash in certain alternative reserve assets, including digital assets, bullion gold, and exchange-traded funds [...]. In addition, we have invested a total of $1.50 billion in Bitcoin under this policy and may decide to acquire and hold digital assets from time to time or over the long term."
What to do now?
The problem for all investors now is only one: to sell or not to sell? Well, by opting for the first option you might risk not enjoying any future gains. However, by not selling, the price could go down, and you would regret not having sold. The coin, momentarily, seems to see a fairly bullish trend that, just over 24 hours after Tesla's purchase, takes it to a new All Time High of $48,142 on the morning of February 9, with a minimum close of around $45,000 around 5:30 pm.
However, another very interesting part of the SEC's Annual Report is the one where Tesla states that, currently, the company intends to hold these digital assets for the long term, and therefore they could negatively affect their profitability in down periods. This means that, for HODLers, this period could prove to be very profitable although, as usual, the cryptocurrency market can be unpredictable.
Conclusions
The cryptocurrency race seems to have no end, and more and more companies and prominent figures are showing their interest in these financial instruments.
Coins like Bitcoin and Ethereum are reaching values that, compared to last year, have exceeded all expectations.
Bitcoin has seen a rise of over 300% since last year, Ethereum has flown to over $1600 going positive by almost 600% in one year.
Are we really on the verge of mass adoption? As always, we'll just have to keep up to date and explore these issues as best we can.
*This article was translated manually and with a translator software from my original post on theledger.it, so I'll attach the link to my article here.
Learn more
- https://theledger.it/news/finanza/visa-le-criptovalute-come-nuovo-metodo-di-pagamento/
- https://theledger.it/approfondimenti/bitcoin-dalle-origini-ai-giorni-nostri/
- https://theledger.it/guide/guida-alla-dichiarazione-delle-criptovalute/
- https://theledger.it/analisi-report/analisi-mercato-ethereum-8-febbraio-2021/
Bibliography
- https://media-exp1.licdn.com/dms/document/C4D1FAQEzQ8VkRaZImw/feedshare-document-pdf-analyzed/0/1612792768600?e=1612990800&v=beta&t=1CPOXYwrtpVTqHXCPuCjzBkTRqWQTyhtCTY8CgN0nrw
- https://www.linkedin.com/posts/activity-6764543575112871936-8PR2/
- https://www.bloomberg.com/news/articles/2021-02-08/tesla-bets-1-5-billion-on-bitcoin-in-new-policy-crypto-surges
- https://www.theguardian.com/technology/2021/feb/08/tesla-bitcoin-price-new-high-elon-musk-dogecoin
- https://twitter.com/elonmusk/status/1340678358456274948
- https://twitter.com/elonmusk/status/1358542364948668418
- https://it.tradingview.com/symbols/BTCUSD/
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