“Bitcoin acts as a currency by what number. Except for online exchanges and geek pizzeria owners, is there anything you can accept?” This is the point that came out with the cryptocurrency (virtual currency) Bitcoin. There is now. It is also a large global company.
Tesla, the world’s largest electric vehicle company, receives the car price in bitcoin. Tesla has also officially added Bitcoin to its asset portfolio. Elon Musk, who is called the’innovation guru’, is known to have led the decision. It is noteworthy whether other global companies could have a ripple effect of adopting Bitcoin as a formal asset or trading instrument.
Elon Musk Tesla CEO
Profit through Bitcoin and hedge inflation
According to a document submitted by Tesla to the US Securities and Exchange Commission (SEC) on the 8th (local time), Tesla raised $1.5 billion (about 1.67 trillion won), which is 7.8% of its existing cash assets of $19 billion (approximately 21 trillion won). I switched to Bitcoin last month. Tesla said on the day that “in the future, additional assets can be invested in digital assets.”
Experts analyze that Tesla introduced bitcoin into company assets for four major reasons. The biggest reason is the value of the investment. According to market research firm Morningstar, the dollar-based bitcoin value soared 356% over the past year from February 9th to the 8th. Musk thought there was a good chance that the price would go up further. Earlier this month, he said, “Now Bitcoin is about to enter the established financial sector.” It is based on the movement of some e-commerce companies.
PayPal, an online payment company that accounts for about 60% of the world’s online payment market, plans to make Bitcoin available for payment within this year.
Bitcoin is also a means to hedge inflation risk. While low interest rates are continuing and inflation figures are rising, it is a loss to stock up on cash equivalents. Tesla announced through the board of directors that it has changed its corporate investment rules so that cash can also be used for gold bars and money exchange funds. Global investment bank UBS explained, “The cash value is expected to decline for a while, so nowadays excessive cash holding is a risk.”
Tesla’s image and’fandom’ are also expected to be strengthened. The US NPR analyzed that “Bitcoin and Tesla have a common point of advocating a technology utopian idealism.” Bloomberg News said, “It is an investment that fits the image of Tesla, which brought a major crack in the automobile market by growing the electric vehicle industry,” and predicted that information technology (IT) enthusiasts will find Tesla more.
Some analysts say Musk is trying to grow the bitcoin market as part of his ultimate goal, the Mars migration project. Mars is looking for an alternative payment method that humanity can use. While it is difficult to use spot currency in space, cryptocurrency doesn’t need spot at all.
Will Apple be the next runner?
Market experts believe that Tesla’s full-fledged introduction of bitcoin will have a ripple effect on other companies. “This is Tesla’s recognition of bitcoin as both an investment and payment method,” said Mohamed L. Allianz, senior advisor. “It could be a driving force to greatly increase the cryptocurrency market.” “The starting point for cryptocurrency to become part of a global corporate business model has come,” said Michael Novogratz, founder of financial company Galaxy Digital.
RBC Capital Market, a global investment bank, predicted that Apple could become the next runner to introduce cryptocurrency. Users of Apple products such as iPhone, iPad, Apple Watch, etc. are spread all over the world, and the electronic wallet service’Apple Wallet’ is already in operation, so if you expand the transaction area with cryptocurrency, you can greatly increase your profits. Mitch Steve, an analyst at RBC Capital Market, predicted, “If Apple enters the cryptocurrency trading business, it will immediately erode its market share.” .
According to the U.S. blockchain research institute, Chainasys, only 1.3% of Bitcoin transactions in 2019 were used for actual commerce. It is said that more than 98% of them are still running only on exchanges. “Tesla’s investment could be a game changer with Bitcoin emerging as a major payment method,” said Dan Yves, an analyst at the financial company Wedbush. “Other companies will follow Tesla’s precedent.”
Reporter Sun Han-gyeol [email protected]