Tesla and Bitcoin, The Duo of the Moment

Tesla and Bitcoin, The Duo of the Moment

When Tesla joined the S&P 500, some people wondered if it wouldn’t bring too much volatility to the index.

Note: It was the biggest inclusion of a company in the index of all times, with a weight of almost 2%. In 2021, stocks rose 460% and more than doubled since the S&P Dow Jones Indices said in November that the automaker would be added to the index.

Tesla Investment in Bitcoin

Elon Musk disclosed that Tesla has invested $1.5 billion in Bitcoin and plans to start accepting cryptocurrency as a form of payment.

For those worried about Tesla’s high price and the stock turmoil, this is something new to consider.

In addition, the automaker’s movement has raised again a debate about the behavior of Elon Musk on Twitter, which whenever he comments something, moves the market.

The company’s CEO has been credited with raising prices for both Bitcoin and the cryptocurrency Dogecoin, posting positive messages that encouraged more people to buy these assets.

Musk added the hashtag #bitcoin  to his Twitter biography, in a move that helped raise the price of cryptocurrency briefly by as much as 20%. Two days later, he said on the social network Clubhouse that “Right now, I think Bitcoin is a good thing and I’m a Bitcoin supporter.”

MicroStrategy and Grayscale Fund Lead Institutional Investors Purchasing Bitcoins

Tesla is not alone. Other institutional investors have also been buying bitcoins, such as MicroStrategy and the Grayscale fund.

Even in this insight — Bitcoin, both sides of the coin — Dex, responsible for the allocation area at XP Inc, explained that the recent rise in bitcoin came, among other factors, from the change of discourse: in the past, digital currency was totally focused on retail, on us.

Today, the focus is completely on institutional investors, and it was this shift that laid the foundation for sustaining the valuation.

So it is. Bitcoin has risen 300% in 2020 and has already accumulated +50% this year, reaching an all-time high of $44,795, due to Tesla’s news.

Editorial credit: mundissima / Shutterstock.com

Peter Baker
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Peter Baker

Peter Baker is a veteran cryptocurrency broker who has accumulated more than ten years of experience within the industry. He is widely recognized for his analytical trading approach and his capacity to predict market shifts in the digital asset landscape. Mr. Baker is dedicated to keeping up with the latest technological advancements in order to offer his clients expert guidance and recommendations.

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