What Does Tesla’s Bitcoin Investment Mean for the Future?
Tesla and Elon Musk recently took the leap and invested over $1.5 billion into Bitcoin. This massive buy spiked the price of the cryptocurrency, taking it to an all time high, with Musk even agreeing that crypto’s are the “currency of the future”.
However, the price dropped again obviously, everyone sold off their coin and made a tidy profit. On the other hand though, many have started to tie Tesla and Bitcoin together, one does well if the other does well, and this could be a good, or possibly a bad thing for both.
Tesla Benefits
Tesla is benefitting from Bitcoin in multiple ways, the first one being the absolutely incredible profit they have already made off of it. The company bought the coin back in January, and by a number of expert analyses, they have made upwards of $1 billion in profit already.
Other experts have stated that Tesla is already on its way to making more money off of Bitcoin, than it will off selling their electric vehicles. This fact is mindblowing considering they only made the Bitcoin purchase a couple of weeks ago.
Tesla also took the step to announce that they will be accepting Bitcoin as payment for their vehicles. This is groundbreaking for the world of crypto’s, as many who have invested have been waiting and hoping for the day that the coins become an accepted form of currency.
It comes as no surprise that Tesla is doing this, as Elon Musk really tries to be a groundbreaker in many aspects of his business ventures, but this could seriously rocket Tesla above and beyond other companies, or force other companies to do the same.
Bitcoin Benefits
Bitcoin is obviously another big winner in this recent deal. The coin has seen massive growth, and as mentioned above, even though the price has obviously dropped again, the massive price spike made a lot of people, a lot of money.
In the bigger scheme of things, Bitcoin, and cryptocurrencies in general, have received something that they have needed for a very long time, legitimacy. While millions of people have bought into crypto’s, it hasn’t been viewed as a legitimate form of currency.
Tesla has changed that, a massive company investing in it, as well as going a step further and saying that you can use your Bitcoin to buy a product, a Tesla car in this instance, is seriously groundbreaking.
This is hopefully a step towards more companies, across the spectrum, being more accepting of the idea that cryptocurrencies can be, and should be, a legitimate form of currency.
There are some places globally, where one or another cryptocurrency can be used to buy something, but on a very small scale. Tesla taking it to a much bigger scale can only be beneficial to them, and to those who have bought cryptocurrency.
Volatility
The biggest downside to the sudden interest garnered by Tesla into Bitcon and cryptocurrency, is the volatility. Volatility has always been a part of the crypto world, the price is determined by buyers, and a massive selling spree for reasons unknown could destroy a coin in a matter of hours.
Considering crypto’s are also not tied to the real life stock market, there really isn’t anything besides faith and speculation that keeps it all going. This point has been made by financial experts as well, Tesla has put itself in the position to be a victim of massive losses if this volatility causes some sort of massive sell-off or collapse.
The Future
Right now, the future is actually looking pretty good for both Tesla and Bitcoin, yes the price may have dropped rather significantly, but that is a fairly regular occurrence when it comes to Bitcoin after a massive spike.
That huge price increase has also affected hundreds of other coins, as the smaller, “alt coins” are tied to how well or badly Bitcoin and Ethereum are doing, with many of them also seeing huge spikes in price and seeing their base price rise by 100%-200%.
As stated a couple of times already, the biggest hope is that Bitcoin, and even other coins, are going to become more and more legitimized and more widely accepted across the world as a genuine form of currency.
Paypal has already announced a while back that it will integrate cryptocurrency into its platform, paving the way possibly for other financial institutions to do the same, considering more people are leaning towards crypto’s as opposed to the more acceptable forms of investment, it would make sense.
Either way, Tesla’s massive investment could have some seriously far reaching consequences for Bitcoin and cryptocurrencies in general, and we just need to wait and see what the next few months and years bring us, who knows when it will happen, but crypto’s have received a massive push on their path to being the currency of the future.
This content was brought to you in collaboration with our media partners.
This article has been published in accordance with Socialnomics’ disclosure policy
