It looks like Musk has taken upon himself the task of helping make Bitcoin (BTC) go mainstream.
The 49-year-old Tesla CEO recently revealed that his electric car company sold 10% of its BTC holdings in order to demonstrate the token’s liquidity while subsequently adding that he has retained his own personal investment in the cryptocurrency.
When looking at the earnings report of Tesla, which bought more than a whopping $1 billion earlier this year, it shows that the luxury EV automobile company generated a whopping $101 million in income from the recent sale.
Musk took to the popular microblogging platform Twitter to announce that Tesla was trying to prove the liquidity of Bitcoin is a good alternative to holding cash on a company’s balance sheet.
As of Tuesday, 10:18 am in London, the world’s largest cryptocurrency was up by 2.3%, to $54,503. Even though it has tumbled down a few steps from a peak of close to $664,870 in mid-April, BTC is still up 7x when compared to the past year.
After Tesla invested in Bitcoin, it led to cryptocurrencies being added onto the agenda of corporate treasurers globally. And while there exist several industry experts and analysts who believe that the token is extremely risky compared to cash, the Chief Financial Officer of the electric vehicle maker Zachary Kirkhorn, on an earnings call, said that Tesla believes in Bitcoin’s long term value.
A number of financial strategists hold the opinion that Bitcoin and cryptocurrencies, in general, are purely speculative investments and cannot be considered a legitimate alternative to cash. BCA Research Inc., for instance, argued that Bitcoin, owing to its volatility, fails to act as a store of value or unit, which is a basic function of money.
Nonetheless, Musk still remains an undeterred supporter of cryptocurrencies. In the previous month, Tesla also announced that they would soon start accepting bitcoin as payment for their cars.
That being said, Musk is not the only individual who is an ardent believer in cryptocurrencies. Before Tesla announced their investment in bitcoin, Square, a payments company led by Jack Dorsey and U.S. software firm MicroStrategy Inc, invested $50 million in BTC in October 2020. But that’s not all.
In the previous year, Bitcoin also saw a lot of support from PayPal, which endorsed the token in the United States. After that, quite recently, MasterCard announced that they would do the same moving forward in 2021. And lastly, Apple Pay has also extended support for BTC.
Thus, all in all, it is well understood that when it comes to bitcoin becoming a mainstream payment standard, the ball got rolling from 2020 itself, but now Tesla is carrying to torch forward and helping the corporate world get familiar with the advantages of holding crypto to beef up balance sheets.
We will keep you updated on all future developments. Until then, stay tuned.
