The news today is big, it’s very big. In fact, what we’ve got going on right now could turn out to be one of the biggest things to happen to Bitcoin in all of 2021. And in my opinion maybe ever?👀 Elon Musk’s company, Tesla, the iconic manufacturer of electric cars, has bought $1.5 billion worth of Bitcoin according to a filing with the Securities and Exchange Commision.
Take a moment to let that sink in. After Apple, Facebook and Google, Tesla is one of the most recognized corporate names in the world. Led by charismatic CEO Elon Musk, Tesla single-handedly made electric cars cool. The very fact that large manufacturers like Mercedes and General Motors are building electric vehicles today is due in large part to the revolution that Elon started.
A revolution starter, that’s a good word to describe Elon. In case you haven’t been on YouTube anytime in the last ten years, besides kick-starting the electric vehicle industry, Elon built SpaceX from the ground up. You know those ultra-cool rockets that come down from space and land on a little yellow X the size of a card table? Yeah, that’s Elon. The rapid rise of Tesla’s stock price has propelled Musk to the top of the capitalist leaderboards where he now reigns as the world’s richest man.
Money hasn’t dulled Musk’s sense of humor though, as one of his favorite pastimes is promoting Dogecoin on Twitter to his 44 million followers. That’s all fine and good, and Musk has definitely sent Doge on an epic run, but at some point it’s time to get real. When we’re talking about the big bucks there’s only one digital asset worth considering and that’s Bitcoin. Here’s what we know so far… Tesla has bought $1.5 billion worth of BTC to put on their balance sheet. The deal is done, the coins are delivered and we can all stop wondering why this recent dip was so short. Why didn’t BTC go down further and stay there longer? Because Tesla was buying the dip!
We also know that Tesla is planning to accept Bitcoin payments. The SEC filing doesn’t say when they’ll start taking Bitcoin but hopefully, it shouldn’t be too long from now. If Tesla can hold Bitcoin they’re probably not far from developing the payment rails they need to accept BTC from customers. The SEC filing also states that Tesla may purchase more digital assets in the future, although there is no mention of any specific plan to do so. But there’s more going on behind the scenes here, let’s go into it…
If you’ve been in Bitcoin for a while you’ve definitely heard of Michael Saylor and the company he is the CEO of, MicroStrategy. Since MicroStrategy’s initial Bitcoin purchase, Michael Saylor has become one of the world’s biggest Bitcoin advocates. He’s gone on dozens of podcasts to explain why he believes Bitcoin is the world’s most valuable asset. More recently, Saylor hosted the “Bitcoin for Corporations” event. The virtual conference included talks from a number of Bitcoin advocates but, perhaps more importantly, Michael Saylor explained how he was able to put BTC on MicroStrategy’s balance sheet.
For a retail investor like you or me, buying Bitcoin is pretty simple. Sign up on Coinbase, go through KYC and away you go. But for a corporation it’s not that simple. The regulatory and legal hurdles can be pretty epic, so it was super cool to see Micahel Saylor explaining the process to other CEOs and corporate treasurers.
Based on the timing it seems unlikely that the conference was responsible for Tesla buying Bitcoin. This purchase is probably something that Tesla has been working on for months. The conference, combined with Tesla’s lavish purchase, has got to be forcing hundreds if not thousands of other companies to take Bitcoin seriously. Government debt is at nearly unprecedented levels and yet the government is continuing to spend like it’s going out of style. Since there’s not enough tax revenue coming in it’s the central banks who are picking up the tab and when that happens it’s just about a one-way street to inflation. In other words, a dollar that is losing value day by day.
MicroStrategy bought Bitcoin to protect the purchasing power of its cash reserves. Tesla is doing the same. Both of these successful companies have assets they don’t want inflated away.
Other companies take note, this is happening, and it’s happening fast. Tesla is not the first and it won’t be the last. In the hours following the news, Bitcoin went up $5,000 and this movement is only just getting started. Elon Musk is followed on Twitter by 1 out of every 9 Americans, and it’s not as though social media is the only place he has a voice. This news is going to spread faster than anything we’ve seen before. PayPal, Square, Druckenmiller, MicroStrategy, and others are just the beginning of institutional money flooding into bitcoin. Tesla may have just burst through those gates like a tidal wave - making more companies likely to put Bitcoin on their corporate balance sheets. Bitcoin has reached a new era of corporate adoption. Who’s next?