New Bitcoin evangelist Michael Saylor, CEO of MicroStrategy, congratulated Elon Musk, the world's richest entrepreneur, for integrating Bitcoin into the balance sheets of his electric car company, Tesla.
Tesla revealed the purchase of $1.500 billion in Bitcoin and is preparing to continue investments in the cryptocurrency, in addition to receiving it as a form of payment when purchasing its products. Given this, Michael Saylor, CEO of the business intelligence company MicroStrategy, who is also a large institutional investor in Bitcoin, pointed out that this is a great step that will benefit everyone.
The comings and goings of the richest man in the world in relation to Bitcoin is causing a great impact on the crypto community. Elon Musk, known as the richest man in the world, according to a Forbes list, expressed his support for Bitcoin (BTC), cryptocurrency largest and most important market by capitalization, through its Twitter account days ago. Musk declared himself a fan of Bitcoin and the reaction of the crypto community to these statements was immediate. The price of the cryptocurrency skyrocketed by more than 13%, reaching $38.000 USD within minutes of Musk's revelation.
However, a few days later, Musk updated his Twitter account again, once again demonstrating his support for Dogecoin (DOGE), the token of Internet memes. When this happened, the price of DOGE again rose, and grew by 53%, after Musk said that DOGE was the digital currency of the people.
Now, just 4 days after this, Musk informs the crypto community that he has a multi-million dollar investment of no less than 1.500 billion dollars in Bitcoin through his electric car company Tesla; Furthermore, he revealed that he wants to integrate cryptocurrency as a payment method in his company. At the time of writing this note, Bitcoin has a value of $46.175 USD, although this Monday the 8th marked a new historical maximum of $47.157 USD.
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New investment policy for Tesla
The car company reported in a declaration before the United States Securities and Exchange Commission (SEC), which updated its investment policy, with the approval of its Audit Committee and its Board of Directors, to diversify its options and integrate new forms of investment in alternative reserve assets, including digital assets, present on the market. Next, Tesla revealed that, based on the above, it carried out a millionaire investment of 1.500 billion dollars in Bitcoin, which represents about 8% of its $19.000 billion cash reserves for 2020.
«In January 2021, we updated our investment policy to give us more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operational liquidity… Thereafter, we invested a total of $1,50 billion worth of bitcoin under this policy and we may acquire and hold digital assets from time to time on a long-term basis.”
Tesla affirms that it will be able to continue making investments in this cryptocurrency in the future, which is now part of its strategies to diversify and protect its cash reserves. The shares of this company follow those of other companies, which are also transforming part of their cash reserves into this cryptocurrency, as it is a very volatile asset in the markets, and therefore, provides great potential for future revaluation.
Musk and Tesla managers affirm that the prevalence of value in Bitcoin in the future is just beginning, and that the million-dollar investments that several companies are making in bitcoins will be maintained in the long term in an essential way. Tesla believes that Bitcoin, despite its volatility and the risks that exist in short, will not lose value in the future, but on the contrary, the market-leading cryptocurrency will continue to grow in value and adoption.
Payments in Bitcoin
As part of the new strategies that Tesla is implementing to diversify its accounting books, the car company also revealed that it is preparing to accept bitcoins as a form of payment for the purchase of its cars and products, in the near future. Tesla assured that this option will be subject to applicable US laws, and that it will be carried out on a limited basis at first. Likewise, the company noted that payments received in bitcoins may or may not be settled immediately once received by the company.
These actions will make Tesla the first automobile manufacturing company to accept payments with Bitcoin, and one of the largest and most solid companies in the world to take an important step towards accepting cryptocurrencies as the money of the future.
“Frightening” news for the rest of the world
On the other hand, the former Comptroller of the Currency, Brian brooks, revealed in a interview that Tesla's investment in Bitcoin is positive for those who participate within this ecosystem, but it is also "scary" news for the rest of the world. For Brooks, Elon Musk's Tesla investment in Bitcoin is nothing more than a demonstration of the instability of the US dollar in global markets. The former currency controller noted that “The way inflation works is that the more assets you have, the less valuable they are.”, and this explains why many companies and institutions now want to have Bitcoin in their treasuries. Cryptocurrency is a “much more stable source of value in the long term,” Brooks concluded in the interview.
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