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Hundreds of thousands are not the limit. Why Elon Musk is overclocking bitcoin




MOSCOW, 9 Feb – PRIME, Valeria Knyaginina. Following Tesla, many tech companies will want to invest in bitcoin, and other investors will join them. Growth, according to experts, will continue, if regulators do not hinder: the possibilities for issuing are finite, which means that cryptocurrency No. 1 will only rise in price. Bitcoin has risen above $ 48,000 Over the past day, the cost of bitcoin has grown by more than 20%, according to trading data. On Tuesday morning, it cost $ 48,000, but during the day it dropped to $ 45,000. The jump in the rate was provoked by the announcement of the American electric car manufacturer Tesla about the purchase of cryptocurrency for $ 1.5 billion. In addition, the company announced its intention to start accepting bitcoins as payment for its products. Tesla reportedly plans to provide more flexibility to further diversify and increase profit margins on cash that is not required to maintain operational liquidity. She has made the decision to invest in bitcoin, although as part of the policy it can invest in alternative reserve assets, gold bars, exchange-traded funds and other instruments. PROMOTION OR TYPICAL SPECULATION As a rule, such decisions in favor of the most risky assets, including cryptocurrencies, are made with the expectation of an increase in its value. This is adequate risk management for new projects. Bitcoin for 2020 has risen in price by 300% and from the minimum of the year – $ 3782 – by 664%. That is, if a large company risks 1-2% of the capital, then it can earn 300% on the invested funds. In essence, this is speculation – an attempt to increase profits at the expense of a non-core business. However, in the case of Tesla, the rate on bitcoin is 90% hype and only 10% is the calculation of the rise in price of the cryptocurrency, according to experts interviewed by Prime. “You have to understand that the decision to buy bitcoin came personally from Elon Musk, who had already several times attracted investor interest in cryptocurrencies and individual shares on his Twitter. & Wall Vladimir Ananiev. In addition, the $ 1.5 billion invested in bitcoin is a small amount for the fourth largest company in the S&P 500 index, the expert notes. AN AVALANCHE OF CRYPTO HUNTERS Yet it is clear that Tesla’s announcement adds confidence to investors. Against this background, the upward movement may continue. Musk’s example could be followed by such technology companies as Apple and Amazon, as well as those working in the field of payments – PayPal, MasterCard, Visa. For example, payment service Square bought bitcoin back in October, and business analytics software provider MicroStrategy buys it regularly. Bitcoin continues to rise By the way, after the speech of the head of MicroStrategy Michael Saylor on February 3 about how corporations can integrate bitcoin and what benefits they will get, analysts saw an impending “avalanche” of companies that are going to invest in bitcoin in 2021. “However, not a single corporation will say that it plans to invest in bitcoin. They only declare when the position is in positive territory by 50-70%. Everyone understands that if they announce their plans in advance, they simply will not be able to buy bitcoin at a profitable price. course “, – explains the analyst of IAC” Alpari “Vladislav Antonov. Investment banks do not hide their interest in cryptocurrencies either. If the Securities Commission (SEC) approves the emergence of an exchange-traded fund (ETF) on bitcoin, it will become an asset. And this will add recognition from institutional investors. This alignment can be considered the biggest victory for cryptocurrencies as an asset class, the expert notes. EVERYTHING HIGHER AND HIGHER Bitcoin is now in a phase of exponential growth and it is difficult to talk about any specific price levels. According to Antonov, the nearest target levels are 59.6 and 66 thousand dollars. “Due to the limited supply, there is no limit. There are only benchmarks in the region of 350 thousand dollars for one BTC. After halving, 6.25 BTC (900 BTC per day) are mined in 10 minutes. This is not enough to meet the increased demand for bitcoin in 2021. “, – he explains. Bitcoin is designed in such a way that it cannot be issued more than 21 million pieces, so the price will tend to go up, adds Ananyev. “However, it is always worth keeping in mind that the volatility of bitcoin is several times higher than that of the S&P 500 index and an order of magnitude higher than that of currency pairs. A decrease in at least half is absolutely normal for this cryptocurrency,” the analyst recalls. A total collapse of cryptocurrency is possible if the world’s central banks begin to ban it en masse and introduce competing means of payment. It is unlikely that regulators will want to take existing cryptocurrencies as a basis, they are more likely to want to invent and impose their own cryptocurrencies, concluded Ananyev.

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