Bitcoin and cryptocurrency bulls cheered Tesla’s shock announcement yesterday that it has bought $1.5 billion worth of bitcoin.
The revelation pushed the bitcoin price to over $48,000 per bitcoin, an all-time high, and chased away bitcoin bears who feared the price could be about to crash. Meanwhile, other cryptocurrencies also soared, with the wider crypto market topping $1.4 trillion—more than twice where it started the year.
Now, with Tesla
The bitcoin price has continued to climb in recent weeks, even as investors warned the bubble was about to burst and bitcoin believers who claimed the cryptocurrency could soon rival gold’s $12 trillion market value were eyed with suspicion.
“Tesla’s investment is further validation of bitcoin’s place as a premium asset for corporate, institutional and retail investors and we should expect to see more large purchases being announced in the coming months,” says Nick Jones, the chief executive of Edinburgh-based bitcoin and crypto wallet Zumo, speaking via WhatsApp.
Tesla adding bitcoin to its books has somewhat normalized the trend started by U.S. business intelligence company MicroStrategy
“Tesla’s $1.5 billion purchase of bitcoins was a trigger for speculators and investors,” says Alex Kuptsikevich, senior financial analyst at FxPro, in emailed comments, adding Tesla’s plan to allow its customers to buy its cars with bitcoin is “a repeat of the hype we saw a few years ago before the crypto market’s mass euphoria in 2017 when small retail companies were vocal about accepting bitcoin payments.”
“In recent months, we have seen how quickly bitcoin has gone from market fun to widespread acceptance by the investor community. Now, however, we see an increase in the use of bitcoin by businesses. This could be a new wave of acceptance of bitcoin as a means of payment.”
Following Tesla’s bitcoin-buy, iPhone-maker Apple
Apple could create a new market for growth if it were to develop its Apple Wallet into a crypto exchange, wrote analyst Mitch Steves, potentially opening up the bitcoin and crypto market to millions.
“The wallet initiative appears to be a clear multi-billion dollar opportunity for the firm (potential for well over $40 billion in annual revenue with limited R&D),” Steves wrote in a note to clients, seen by Bloomberg, referencing the fees collected by the likes of Square’s Cash App for facilitating bitcoin-buying and trading.
“Yesterday’s move by Tesla to invest in bitcoin and start accepting it as payment for its own products really moved the needle,” Simon Peters, crypto-asset analyst at brokerage eToro, said in emailed comments. “Already there is talk of copycat moves from Apple and Google
Elsewhere, Tesla’s bet on bitcoin looks likely to help government bitcoin adoption.
Miami Mayor Francis Suarez has said he is working on a resolution to add bitcoin to the city’s balance sheet.
“Working on a resolution for our commission for this Thursday’s meeting to get the ball rolling,” Miami mayor Francis Suarez said via Twitter, adding Tesla CEO Elon Musk’s “announcement was very helpful.”