Tesla And Bitcoin: What’s Going On? — Alexander Powell Cheltenham
In January this year, Tesla invested a whopping $1.5 billion bitcoin. Tesla is currently embarking on a nonconventional move to diversify its investments. The news of the investment became public when the public filing was made.
Tesla & Bitcoin
The CEO and founder of Tesla made his support for bitcoin public even before the public disclosed the investment. Elon Musk has been promoting cryptocurrency in recent weeks. This is new because Elon Musk tweeted about the risk of holding cryptocurrency in the past years, calling it an equivalent to fiat money.
However, his thoughts seem to have changed over the years. Regardless, several questions are surrounding the reason why Tesla made this move and what it means. In this post, we will be discussing and breaking down this move by Tesla.
Reasons Why Tesla Invested In Bitcoin
One of the main reasons why Tesla decided to invest in Bitcoin is its desire to diversify its investments. In its most recent annual report, Tesla announced that the company created a policy where it is allowed to move flexibly and diversify its image through investments. The official Tesla board authorized the policy.
This policy is aimed at maximizing returns on Tesla’s money. This new policy also allows Tesla to invest in various forms of digital assets. It is also worth noting that this new policy announces that Tesla has become an investment vehicle.
Regardless, this does not explain why the company chose bitcoin. The digital currency market is not one of the most sought after industries by investors because there are many concerns about its dependability and volatility.
It is also worth noting that any bank or government does not guarantee Bitcoin. It works so that investors can mine the digital currency by devoting computer power to authenticating other bitcoin transactions. Investors can also sell or buy this digital currency using real money.
What Does This Acquisition Mean?
Tesla expects to see a fluctuation in the value of its digital assets following this move. However, the company still expects to benefit from this acquisition.
In the public filing that announced this acquisition, Tesla disclosed that it would soon begin accepting bitcoin as a payment mode for all its products. According to analysts, this indicates that every company should be looking into how to accept digital currencies as part of their business scheme.
The fact that Tesla, one of the most prominent organizations globally, is doing this indicates that things are changing. By announcing this move, Tesla has encouraged more companies to take the route. By doing so, Tesla has increased the chances of bitcoin’s prices rising even further.
It is worth noting that immediately after this announcement became public, bitcoin’s price moved rapidly higher. This increase is a benefit for Tesla, which will be getting their money’s worth sooner than expected. Digital currency has hit an all-time high as a result of the acquisition.
This has generated a lot of discussion and debate about what this could mean for the digital currency industry. Some analysts commented that Bitcoin is rapidly moving to the mainstream following multiple investments by mainstream organizations like it is the case with Tesla, “one of the best car manufacturers in the world,” according to Alexander Powell, a car enthusiast based in the UK.
Following the 1.5 million dollar acquisition by Tesla, Bitcoin is bracing for significant inflation in prices. This means that Tesla is also looking to benefit financially.