Although Tesla recently made its way into the crypto market, it generated immense hype around the announcement. On February 8, the automaker surprised the crypto world by investing $ 1.5 billion in Bitcoin (BTC) and announcing that the company will soon be accepting payments in crypto. As a result of the news, BTC rose to $ 48,000, then cooled down and stood at $ 44,500.
In the course of this development, it also became clear that the above-mentioned increase was largely carried by whales, which Tesla’s announcement saw as a buy signal. In this regard, according to the data available on Binance, the whales have seen “unusually large BTC purchase volumes”.
Analysts believe that every time a large publicly traded company breaks into the digital asset space, a frenzy begins that creates positive market sentiment around BTC. For example, Filbfilb, a pseudonymous Bitcoin trader, explained that from today’s perspective An increasing number of companies will be forced by their shareholders to take some risk on cryptocurrencies.
What does the Tesla move mean for the industry?
According to Hunter Merghart, the head of US operations at Bitstamp Exchange, Cointelegraph said: Though Square paved the way for everyone, Tesla’s acquisition of Bitcoin is seen on its balance sheets as a turning point for the industry.and added:
“The risk of increased adoption by both retailers and institutions has gone. This will ultimately lead to more positive pricing action as new institutional and retail businesses need time to join and fund the accounts.”
Sam Tabar, former CEO of Bank of America Merrill Lynch and co-founder of Fluidity – the company behind the P2P trading platform AirSwap – shares a similar view This is the moment the cryptocurrency industry has been waiting for, that is, received an institutional seal of approval for Bitcoin from an SP 500 company.
Likewise, Tabar mocked critics and told Cointelegraph so A few years ago, people made fun of Bitcoin and cryptocurrencies in general as a tool used by drug dealers and other criminals. “So you said that Bitcoin is using too much electricity, but if you compare the electricity consumption of BTC to the total electricity consumption of traditional finance, you’d be pretty surprised,” he added.
Finally, Ben Zhou, CEO of the Bybit exchange, told Cointelegraph that Tesla’s introduction of Bitcoin had lowered companies’ risk calculations It now envisages small but steady corporate adoption, including multinational corporations, the building of which will ultimately bob against significant volatility.
Additionally, he believes that with Bitcoin becoming more widely accepted in the eyes of institutions and businesses, the cryptocurrency community may have more incentives than ever to innovate in this emerging area. For example Merghart believes that in the near future there will be more multinational companies exploring Bitcoin and eventually even other crypto assets through loans or faster cross-border payments through stablecoins.
Is further diversification of cryptocurrencies inevitable?
While the recent moves by MicroStrategy, Square, and PayPal have helped generate decent traction for cryptocurrencies, it cannot be denied that the Tesla acquisition has drawn the most attention to the industry in its decade of existence. Just check out major media outlets to check out and how almost every news agency has told the story since then.
Stephen Stonberg, COO of Bittrex Global Exchange, told Cointelegraph that he believes the announcement has grown and will continue to raise awareness of Bitcoin and the cryptocurrency market in general, adding:
“Other US multinationals might consider diversifying their asset bases with other digital currencies that haven’t seen the same appreciation as Bitcoin in recent months. For too long, investors have faced negative return bonuses. Overvalued stocks. Now digital assets offer one real value diversification opportunity. “
The same perspective shares Paolo Ardoino, technical director of the digital asset trading platform Bitfinex, who informed Cointelegraph Tesla’s announcement could very well “take cryptocurrency to a new level” and that there may be no “going back” for the industry in the future. He continued, “I hope that Bitcoin will improve the balance sheet of many companies as its quality as a form of digital gold becomes more relevant.”
Another company whose name has recently surfaced in relation to Bitcoin is Apple, especially since the multinational is uniquely a leader in the domain of consumer technology. Kris Marszalek, CEO of digital currency payments platform Crypto.com, told Cointelegraph that the move would be extremely optimistic for the company if Apple Pay expanded its support for cryptocurrencies.
In addition, even Marc Benioff, CEO of the American cloud software company Salesforce, tweeted recently a cryptic message that says: “Trust is the currency of the kingdom,” which has led many to speculate that the $ 200 billion company with nearly $ 10 billion in cash may also be considering Bitcoin or already investing in Bitcoin.
On the subject of diversification, Marszalek said: “Our world today is marked by zero interest rates and the endless deterioration of fiat currencies. To keep up, institutions need to look for alternative haven of value, of which Bitcoin is one of the best.“.
Not everyone believes the “hype”
While the cryptocurrency market has continued to see unprecedented positive development in recent months, there are also many traditional financial sector players who believe that the Tesla move is just a one-off phenomenon and that people shouldn’t expect many other big players to follow suit Steps of the company.
For example strategists at the investment bank JPMorgan Chase, headed by Nikolaos Panigirtzoglou, They believe Tesla’s purchase of $ 1.5 billion worth of Bitcoin will not necessarily trigger similar investments.
In the same way, Eternal defender of gold Peter Schiff also highlighted the fact that Tesla’s new investment policy enables, and indeed achieves, the purchase of gold bars and exchange-traded gold funds propose that the company is already discharging its investment in BTC as the market reacts to the news by increasing its value.
Finally, Matvey Voytov, director of marketing for Waves Enterprise – a blockchain platform for businesses – told Cointelegraph It is quite unlikely that other companies will blindly follow Tesla and say, “I hope most large companies will wait as there are still strong barriers to entry for crypto laws in most countries.” He also believes investors will prefer a safer way to invest, as “many corporate finance leaders remember being burned out in 2008 with higher-yielding options”.
Proponents of the cryptocurrency point to quantitative easing
Although the cryptocurrency market continues to experience daily fluctuations in volatility, it should be remembered from a macroeconomic perspective that over the past nine months Central banks around the world continued to print their local currencies, which has resulted in an unprecedented dilution of most fiat assets.
Related: Coincidence? The company’s shares rise after buying bitcoin as a reserve
For example, the US Federal Reserve has deployed a number of stimulus packages since the COVID-19 pandemic began. The most recent value is around $ 3 trillion. In addition, the central bank has promised to continue printing a total of $ 120 billion per month for the foreseeable future to help the US economy recover.
Stonberg found that there was such a high level of quantitative easing “You could get multinational corporations to hedge themselves with tougher assets like limited digital assets, gold and silver as hedging deals.”