Will Tesla’s Recent Investments In Bitcoins Encourage Others To Do The Same

PayPal’s announcement of starting cryptocurrency payment solutions that included Bitcoin was big news. It helped Bitcoin reach record numbers and breach the $20K mark for the first time. However, the PayPal news was handsomely overshadowed by Tesla’s recent SEC K-12 filings.

The electric automaker has disclosed that it has invested in $1.5 Billion worth of Bitcoins to aid its cryptocurrency liquidity. The news was followed by Tesla letting the world know that it would be the world’s first automaker to accept Bitcoins as payments. Wall Street went into a tizzy even though Elon Musk’s love affair with cryptocurrencies is fairly well known.

In this article, we speculate realistically whether the road ahead will invite other names to do what Tesla and Elon Musk has done. Namely, invest in Bitcoins.

What Analysts at JP Morgan are saying about others following the Tesla example?

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Leading names at JP Morgan like Nikolaos Panigirtzoglou are of the opinion that Tesla’s example is too dramatic of an investment for others to be making.

He and others point out that companies usually plan for a swing of around 1%. He says that a 1% swing in Bitcoin would expose around an 8% asset base for a big business. This is something that most businesses do not see a lot of financial sense in.

He goes on to say that established big businesses usually fill up their investments with things like- deposits in the banks, market bonds, and government bonds. In other words, all asset classes are non-volatile in nature. Bitcoin, even though it has recently matured is considered too risky a proposition for a business to invest in.

However, critics point out that while Panigirtzoglou is right in some areas, he is wrong in others. They state that Tesla has declared that it is investing in Bitcoin in order to overcome a liquidity crunch when they start accepting Bitcoin payments. For many analysts, more than an investment, this is a sound business and payments decision based on the merits of Bitcoin.

Will Businesses really jump on the Tesla Bitcoin Bandwagon: Here is what we feel

Tesla’s 8th February 2021 announcement was followed up by another big name associating its name with Bitcoin- MasterCard. One of the world’s biggest payment companies was quick to seize the moment and announce to the world that it is now open for crypto-related businesses and services.

This means that now in the world of financial payments, you have PayPal along with MasterCard offering crypto services. This is a big announcement, especially given the fact that MasterCard walked out of Facebook’s Libra Association.

Elon Musk is one of the greatest visionaries of our times. He has revolutionized the automobile sector, the space aviation industry, along with being the father of the modern digital payments network with PayPal.

The man does things that he believes will create industries and businesses of the future. Other companies who had to date detested Bitcoin and other Cryptocurrencies are now frantically searching for ways to understand and engage with them.

The next few months will see a spurt of companies that are backed by Wall Street start meaningful engagements with Bitcoin, Ethereum, and other major cryptocurrencies. 

The Bottom Line

The world’s big business knows that there is a financial revolution coming in the way we engaged with traditional currencies. With world leaders being incompetent in their handling of economies, it is maybe time to take financial control away from their hands. If anybody is going to do it, it has to be Elon Musk and his motivated team of world changers.

According to it is only a matter of time before other businesses understand the benefits of accepting Bitcoin payments for their business growth. Do you think other big businesses will join Tesla in Bitcoin investing? Let us know in the comments section below.