After repeatedly speaking about Dogecoin on social media for weeks and changing his profile description to the hashtag Bitcoin in the meantime, the richest man in the world is now getting serious. While we don't know if Elon Musk has bought Bitcoin himself, his company Tesla certainly has.
At the same time, the company has been invested in BTC for quite some time without us noticing. What can we expect from the decision and how will it affect the overall market?
The Form 10-K
Although most headlines read that Tesla has now invested, the actual purchase has been over for some time. Tesla has notified the U.S. Securities and Exchange Commission (SEC) of its 2020 financial statements in a form 10-K, which is an annual document that needs to be filed with the SEC. In the course of this, they also mention the company's changed policy regarding Bitcoin and other speculative assets.
Accordingly, they purchased $1.5 billion worth of BTC as early as January 2021, and they also plan to acquire other assets, or at least hold them in prospect. But the real scoop is hidden in a side sentence, because Tesla could soon accept Bitcoin for purchases of their products. Tesla is morphing into a real hype factor for Bitcoin.
What does this mean for the market?
In the end, Tesla's investment not only brings high media attention to Bitcoin, but legitimizes the idea that BTC is a safe haven and suitable as a store of value. Until now, this perspective was considered rather exotic, gaining more acceptance but attracting little capital overall.
If we take a look at the dimensions of other assets that are considered to be stores of value, we notice that the market for BTC is comparatively small. It is safe to say that we are at the beginning of a wonderful development, because now Bitcoin could become really popular.
Besides MicroStrategy and Blackrock, Tesla is now also invested and the company can potentially increase its Bitcoin reserves at any time.
Besides Bitcoin, Elon Musk himself had only one hobby via social media: Dogecoin. Musk was joined by Gene Simmons and Snoop Dogg all three of them meming on social media.
Dogecoin is considered a risky investment because unlike Bitcoin, it was designed as a joke and was never intended to be a serious cryptocurrency. However, the fact that Tesla supports Bitcoin and may soon accept it for payment gives reason for speculation. Will Elon Musk be the next to bring Dogecoin on board at Tesla? Or maybe even at SpaceX?