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In the past decade, the popularity and value of Bitcoin stock have skyrocketed. Almost everyone has heard about Bitcoin; however, a surprising amount of people don’t even know what the cryptocurrency does. Bitcoin is the largest cryptocurrency service in the world, meaning it is a digitized file stored in a virtual wallet that has monetary value. The popularity of Bitcoin stems from the aspect that bitcoins can’t be controlled by the government or banks, meaning that they can’t monitor the circulation of the currency.
1: What does Tesla’s investment mean?
The other firm in this situation, Tesla, is a major American automaker that is known for producing high-end electrical vehicles that are affordable. Similar to Bitcoin, Tesla has recently grown into popularity. The CEO of Tesla, Elon Musk, has just surpassed Jeff Bezos to be crowned as the richest man on the planet. Tesla and Bitcoin just had a groundbreaking interaction that astonished many worldwide.
On Monday, February 8th, Tesla released the news that it has invested $1.5 billion into Bitcoin. They also announced that they are planning to allow payments of cars using bitcoins. Tesla is the first automaker to accept Bitcoin as payment, which is why this announcement is so revolutionary and shocked many globally. Elon Musk is no stranger to cryptocurrency. He is credited for single-handedly increasing the prices of cryptocurrency stocks such as Bitcoin and Dogecoin just by saying something positive about them. In fact, just two weeks ago, Musk was able to bring the value of Bitcoin up 20% after just adding #bitcoin to his Twitter bio.
2: How have other companies reacted?
This wasn’t the first time a company has invested a lot of money into Bitcoin. Another American company, Microstrategy, bought $250 million worth of bitcoins. They are now worth $3.1 billion. It is speculated that Musk got the idea to make this move after seeing how it benefited Microstrategy. On the other hand, Tesla’s competitor, GM’s (General Motors) CEO Marry Bara stated that he doesn’t have any intent to follow in Tesla’s footsteps and invest in Bitcoin. Other automakers have not commented on the scenario.
For now, there isn’t much information about the relationship between companies and investing in cryptocurrencies since it’s a relatively new topic. Bitcoin is a volatile stock, meaning it is risky. This is the reason why this isn’t a common situation, hence all of the commotion. Until then, we can only wait to see how cryptocurrencies can transform our way of life.
- Bitcoin is a cryptocurrency, meaning that it is a virtual file that contains monetary value.
- Tesla invested $1.5 billion into Bitcoin and announced that they will use bitcoins as payment for their cars in the future.
- GM, Tesla’s main competitor, doesn’t plan on following Tesla and investing into Bitcoin. Other automakers have stayed quiet regarding their intentions toward Bitcoin.