Musk with Bitcoin plus Tesla… The next company is Apple? [김영필의 3분 월스트리트]

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Elon Musk, CEO of Tesla, an electric vehicle company, had another major accident (?). The reason for thinking is because the impact on the market is so great.

In a report published to the US Securities and Exchange Commission (SEC) on the 8th (local time), Tesla revealed that it had bought $1.5 billion (about 1.7 trillion won) worth of bitcoin for investment diversification and cash return. At the same time, he said he plans to sell cars for bitcoins in the near future. On this day, the price of Bitcoin skyrocketed. The previous day, the price between 38,000 and 9,000 dollars per piece exceeded 44,000 dollars. In addition to the market reaction and analysis of Musk’s actions, we will provide an uneasy situation due to the surge in bond rates.

As mentioned earlier, Tesla’s move is something that can affect the economy as a whole, beyond just investing in Bitcoin. In the first place, it will affect the price and reliability of bitcoin, but in the medium to long term, it could further fuel the debate over bitcoin as a means of payment, or currency. CNBC, a US economic broadcaster, said, “It seems to be the first time among automakers (to accept Bitcoin).”

On Wall Street, it is said that both Bitcoin and Tesla stock prices are positive. On this day, Tesla shares rose 1.3%. “Tesla’s bitcoin investment is a really big deal,” said Michael Novogratz, CEO of Galaxy Digital.

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Dan Ives, managing director of a securities firm, Wedbush, said, “The outlook for the market is mixed, but it is clearly positive for Tesla’s stock price.” “Tesla’s move has increased the credibility of Bitcoin. It will have the ripple effect of buying bitcoins by ordinary investors following Tesla.” It means that Tesla can give you the perception that you can invest as much as you buy.

However, as Dan Ives said, there are many views that critically view Tesla’s movements. Musk had a lot of sudden behavior, though not. During the GameStop incident, I supported the ants by posting a post called’gamestonk’. This time, some point out that Tesla has put bitcoin, which is said to be speculative, on the most controversial stock in the market. If you buy Tesla stock, you can invest in both at once. The Wall Street Journal (WSJ) said, “Tesla’s investment in bitcoin has more than a symbolic meaning.” This adds to the speculation craze for Tesla’s stock price.”

Because of this, not a few say that Wall Street doesn’t understand Musk’s behavior. There are many stories of disturbing the market. Personally, I think Musk is throwing stones into the market excessively. Last month, it was interpreted that the self-introduction column on the Twitter account was changed to’#bitcoin’ to give a buy signal among individual investors. As a result, even though Tesla bought bitcoin, if this is the case, a single word of his tweet could lead to excessive market sway. It is by no means only desirable.

After all, it is clear that he has a megaton-level influence on the market. It is true that no one is so free and not afraid of new challenges. “With this move, Tesla stocks and bitcoin’s bullish momentum will continue,” said Mohamed L. Elian Allianz, senior advisor. . That means more companies can follow Tesla’s policy.

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In fact, RBC announced that Apple could become a cryptocurrency investor following Tesla. Mitch Steves, an analyst at RBC Capital Markets, said, “If Apple jumps into the cryptocurrency market (worth billions of dollars), it will have a potential revenue opportunity of $40 billion per year. The coin value will probably go up.”

In other words, just buying bitcoin from Apple will increase the price and help Apple. CNBC said in this regard, “Apple has not yet announced its intention to buy cryptocurrency and is focusing on holding large amounts of cash.” Last year, companies such as Fidelity, Square, and PayPal were friendly to the use of digital currencies.

On this day when interest in Tesla was concentrated, the Dow and Standard & Poor’s (S&P) 500 reached an all-time high. Up until a while ago, it went back and forth in the game stop situation, but it started to climb again and again.

In the process, bond rates are being shaken. Firstly, it is because of the anticipation of an economic recovery. The day before, US Treasury Secretary Janet Yellen suggested that if additional stimulus measures for the novel coronavirus infection (Corona 19) were passed, the economy could recover quickly, saying that a full employment could be possible next year.

If you flip the word that full employment will take place next year, it is sometimes said that interest rate hikes and tightening may occur next year. Of course, interest rates and quantitative easing (QE) are handled by the Federal Reserve System (Fed), and many requirements must be met, but the term full employment can mean the beginning of tightening.

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On this day, the 30-year Treasury yield at one time exceeded 2% per year. 10-year government bonds also soared 1.2%.

This is important as it can change the flow of money from the stocks to the bond market, as I said in’Three Minute Wall Street’. Barrance, an investment magazine, said, “With a 30-year Treasury yield hitting 2%, we are interested in when the bonds hit the stock market”. I have.”

For the time being, even higher government bond yields will not have a direct impact on the stock market. Barrence predicts that up to 1.75% of the 10-year Treasury bond rate will be fine.

Investment bank (IB) Goldman Sachs’ analysis is more optimistic. Goldman Sachs predicted that “the rise in bond rates does not threaten the bull market,” and that “it will be below the’tipping point’ for some time given the historically low interest rate level.” The tipping point refers to the point where the situation is sharply shifted to one side, and you can think of it as a sudden change point.

In particular, Goldman Sachs believes that a 10-year Treasury bond yield must rise above 3.5% to affect the stock market. This means that the stock market will continue to rise for some time.

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/New York = Correspondent Kim Young-pil [email protected]

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