In a 10-K filing yesterday, Tesla announced the purchase of $1.5billion in bitcoin and their intention to acquire and hold more digital assets. The company also mentioned they will begin accepting bitcoin as a form of payment for their products in the near future.
To crypto market analysts and investors, this had been expected for some time now, several market analysts had Tesla and Elon declaring ownership of bitcoin this year, most of us thought this will happen in Q3-Q4. The shocking aspect of the statement was the idea of accepting bitcoin as a medium of exchange for Tesla vehicles.
Analysts of all markets will know that we are in the everything bubble, every single asset class, and financial market looks and feels bubbly, however, we will say of all the bubble across financial markets, the digital asset and bitcoin market is the smallest of all the bubbles, the upside in this market is incredible, we will witness several publicly listed companies rushing to acquire bitcoins and set up bitcoin payment infrastructure, this will be similar to companies in the late 90s rushing to acquire a dotcom (.com) domain name and email addresses.
We are in the early days of this new asset class, the companies like Microstrategy, Square, Tesla, etc that make the effort to understand how this technology works and find ways to connect this technology to their business operations will be the winners of the generation.
In the era of negative interest rates, having a pile of money sitting in a bank account is akin to placing ice cubes in a hot sunny weather condition, the ice cubes melt away and your money in a bank account is devalued. Tesla adding $1.5billion in bitcoin to its balance sheet is a match made in heaven.
