Industry News Tesla Motors could be expanding its Portfolio into Bitcoin

Tesla Motors could be expanding its Portfolio into Bitcoin

December 22, 2020

2020 so far has been a year of spectacular price growth in the domain of cryptocurrencies, especially bitcoin. The dominant cryptocurrency in the world recently saw its price jump several thousand USD over the previous record. Now, it seems only a question of a day before the landmark value of 25,000 USD is attained. A big part of the huge price rise and a series of record-breaking moments in the past several weeks has been the process of institutional investment. The world, for the first time since cryptocurrencies began working, saw a steady and constant process of digital currency investment from international companies.

Some of them, like MicroStrategy, invested hundreds of millions of USD into bitcoin, pushing its price up and up as everyone else read this clear and unmistakable signal. From it, other individuals and businesses began noticing the value of the bitcoin network and more than anything else, read the investment decisions as a verification of the setup’s long-term value. In the previous decade, it was precisely this stability of the actual network, not its token price, that was the main element of doubt and uncertainty in the eyes of many potential investors. Now, as the same longevity and stability of the network solidify in the mind of the general public, more and more companies are examining their own possible investment into BTC. Recently, one of the most famous tech companies also signaled that it too is interested in joining the crypto investment domain. That company is none other than Tesla Motors.

Elon Musk Twitter Relieve

Unsurprisingly, the news about potential investment into bitcoin of this company came from its founder and CEO, Elon Musk. Equally unexpectedly, details came over his social network of choice, Twitter. There, the chief of Tesla Motors added to the current speculation that it could add bitcoin to the company’s balance sheet. That took the form of a question, where Musk asked his followers whether or not it would be possible to convert the billions of USD that the company holds into bitcoin.

This took place inside of a wider discussion about the MicroStrategy decision to buy nearly one billion USD in bitcoin. Also, the CEO of MicroStrategy Michael Saylor, said to Musk that such a move would do his shareholders an incredible favor, as other S&P 500 companies would follow his lead. The same would, in Saylor’s words, produce a profit of hundreds of millions of USD for both the company and indirectly, for its shareholders as well.

Tesla Wave

Tesla Motors, like many other tech companies, has been having a really good year. Despite the overall abysmal business environment for most industries, technology ventures found an unexpected footing in a world that has suddenly shifted to a range of tech solutions as a counterweight to the pandemic. As more and more physical retail venues began to shut down, commerce moved online. When bars and restaurants closed just as fast as business offices, teams and personal hangouts in equal measure began using Zoom to stay in touch and get the job done.

While traditional sports competitions shut down completely, esports began growing and flourishing at an amazing rate. In this growth of value for all things tech, Tesla Motors also found its pot at the end of the rainbow. In it, 2020 had an increase of 730 percent for its price share. Now, S&P 500 places Tesla as the sixth most valuable business. Comprehending which companies are ranked above it is just as big an eye-opener as anything else. Presently, only Apple, Microsoft, Amazon, Google’s Alphabet, and Facebook are more valuable than Tesla. The success of Elon Musk’s venture at this point is beyond gigantic.

Bitcoin Success

Like Tesla Motors, bitcoin had an incredible year. So far, it has added somewhere around 235 percent to its value this year. The price of the BTC token skyrocketed in December, beating the previous record by somewhere around 4,000 USD or 20 percent in a space of a single day. That kind of event cannot go unnoticed even in the corporate domain, which was almost exclusively closed to cryptocurrencies just a few years ago.

For example, the 2017 bull run in the crypto domain was drastically enforced by the appearance of the bitcoin futures product on the traditional financial markets. Back then, many were certain that the price was going to skyrocket as well once the companies recognized this development and began pouring money into the same space. However, nothing of the sort happened back then. Instead, the range of 20,000 USD for a bitcoin token was reached but did not move further. In the following months, the price plummeted down and 2018 saw the start of the Crypto winter, which lasted well into 2019.

Strange Influences

The discussion that Elon Musk had on Twitter also had its strange side effects. In the same exchange, Musk mentioned that dogecoin is the best possible location for crypto investment. On that tweet, the price of this cryptocurrency jumped up 15 percent. That tweet also piggybacks on a previous online joke where Musk wanted to become the CEO of this cryptocurrency. Naturally, the mainstream media had a field day with the same event, using it once again to underline the strange and volatile nature of cryptocurrency influences.

However, this does not take away from the clear potential of Tesla Motors as a future investor in bitcoin. Right now, that event is not around the corner, at least as far as anyone can gather, but it is not unimaginable. Having in mind the tendency of Elon Musk to generate and capture media attention, such a move would be very much in line with his previous similar activities. From the perspective of the crypto community, even a modest investment by Tesla would be a huge boon, especially in terms of free marketing. That event alone would likely push up the price of BTC instantly. But, at the same time, it is important to recognize that the volatility of Tesla stock could see its price slashed in the coming months just as easily.

Source: Forbes