Elon Musk, a modern-day Tony Stark, is the CEO of Tesla and SpaceX, as well as the CEO and founder of many other companies. His electric car company, Tesla, has been a trendsetter for the electric vehicle sector. Their investments are no exception. On Monday, Feb. 8, several news organizations reported that Tesla had bought Bitcoin using their cash reserves. This purchase is coupled with the news that Tesla plans to begin accepting Bitcoin as payment for their cars. This announcement sent Bitcoin to all-time highs, with one Bitcoin currently sitting at $46,462 as of Monday evening.
These reports spell good news for cryptocurrency advocates such as myself. Monday morning was full of news sites reporting on this huge story, as it suggests true momentum for the widespread adoption of cryptocurrency. According to CNBC, “Tesla announced Monday it has bought $1.5 billion worth of bitcoin. In a filing with the Securities and Exchange Commission, the company said it bought the bitcoin for ‘more flexibility to further diversify and maximize returns on our cash.’” (1) This investment by Tesla validates many cryptocurrency advocate’s claims that cryptocurrency is the future. This isn’t the first time Elon Musk advocated for cryptocurrency.
In late January, Musk added an interesting line to his Twitter bio. “Musk added #bitcoin to his Twitter bio earlier Friday morning. He also sent out a cryptic tweet, saying: ‘In retrospect, it was inevitable.’” (2) The same article discusses Musk’s bio as it increased Bitcoin’s price. “Bitcoin skyrocketed as much as 20 percent on Friday after Elon Musk added the hashtag #bitcoin to his Twitter bio.” (3) With the support of one of the richest humans on Earth, Bitcoin was sure to surge, and it continues to increase in price as more and more people are exposed to Bitcoin, cryptocurrency, and DEFI.
For cryptocurrency advocates, this purchase by Tesla is a significant step towards public recognition and public adoption. As Bitcoin continues to surge in price, critics claim that Bitcoin has no inherent worth, and therefore has no true value. However, proponents of the grandfather of cryptocurrency claim that the trust is in the system and network, and that the worth of Bitcoin is based on the trust on the network. As long as trust in the network exists, Bitcoin will continue to surge in price. Bitcoin enthusiasts suggest that Bitcoin’s price could in fact exceed $100,000 or even $500,000. It is all based on the trust in the Bitcoin network: The more trust, the more a single Bitcoin will be worth. As more and more people trust the network, its price will rise.
Several big hedge funds and large banks have already bought Bitcoin, and traditional investors have exposed themselves to blockchain-related stocks such as Riot Blockchain and Marathon Patent Group. However, this massive purchase by Tesla suggests their trust in the Bitcoin network, and signals to other traditional investors that Bitcoin is a good long-term position. As cryptocurrency continues to surge in price, it won’t be long before we all start using cryptocurrency on everyday purchases, to pay for groceries, pay bills, pay taxes, and anything else we pay for. As I have said before, cryptocurrency is the future. It is not a matter of if, but a matter of when it will be widely implemented and accepted.