The world’s wealthiest man, maverick SpaceX and Tesla CEO Elon Musk, has had more than a significant impact on the cryptocurrency market.
Musk, who overtook Amazon mogul Jeff Bezos as the highest value individual on the planet in January, has long been assumed by crypto enthusiasts to have a keen interest in digital currencies, with a number of referential tweets to coins like Bitcoin and meme currency Dogecoin appearing on his timeline in the last quarter alone.
Such is Musk’s influence among tech enthusiasts on social media, a simple tweet about Dogecoin – a ‘joke’ currency developed in 2013 which bears the brand of the infamous Shiba Inu dog – saw a rush on the currency which led to its value increasing exponentially.
With more and more services being developed for the casual crypto trader, like https://btcrevolution.io, the actions of influential figures like Musk can have a massive impact on the sentiments behind specific currencies. Which is why his latest move has seen Bitcoin soar to an all-time high value.
Centibillionaire Musk’s luxury electric vehicle brand, Tesla, filed its $1.5bn investment in Bitcoin with the Securities Exchange Commission (SEC), while also confirming that it would soon allow customers to purchase their own Tesla vehicles with the cryptocurrency.
Tesla said: “We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis.”
The company explained that the motivation behind the move was to allow “more flexibility to further diversify and maximize returns on our cash,” and many crypto enthusiasts see the Silicon Valley company’s move as just one more example of cryptocurrency’s gradual adoption and acceptance in the mainstream.
Eric Turner, a senior figure at crypto research company Messari, said: “I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move.
“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla, or even just an S and P 500 fund, has exposure to it as well.”
While investor exposure is a key pillar of the whole cryptocurrency ecosystem, another is adoption – and Bitcoin continues to weave its way into more and more markets as a means of exchange. In recent times, PayPal has climbed on-board the bandwagon, while crypto is also beginning to make its way into luxury real estate and the rental sphere.
It is not just on Twitter where Musk has been espousing the virtues of all things crypto, in fact, he shared his views on the decentralised currency on the invite-only chat app Clubhouse a few weeks ago.
He is reported to have said: “I am a supporter of Bitcoin. I am late to the party but a supporter. I think Bitcoin is on the verge of getting broad acceptance by conventional finance people.”
Of course, not everyone is as bullish about the blockchain as Musk is, and the motivation behind Tesla’s decision to accept Bitcoin may simply be about long-term commercial strategy.
After all, the emerging cryptocurrency elite does not share the same cultural DNA and demographics as traditional high-value individuals – they tend to be a tech-savvy, younger audience. By making Tesla products available to purchase through Bitcoin, the company presents itself as an attractive proposition for wealthy cryptocurrency investors.
The gamble is not as significant as it may seem at first glance, either. With a company value of over $800bn, a $1.5bn investment in Bitcoin could prove to be a simple loss leader in the medium to long-term. If things go well, and Bitcoin’s price remains stable, it may not take long for Tesla to sell enough products to the crypto market to recoup their initial investment.
In the short-term, Tesla’s investment is already in the black. As of Tuesday, the vehicle manufacturer’s $1.5bn has already gleaned $561m as value has risen. Of course, cryptocurrency value tends to fluctuate quite broadly, and the proof will be in the long-term.
One thing is for sure, though, the debate around cryptocurrency as an investment is not going away – and, for now, market value keeps going up.