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Monday, February 8, 2021

The Elon Musk Effect: Not Just Bitcoin, Now Gold

 


Bitcoin had a happy Monday for crypto investors as it hit new record highs of over $ 44,000, following the news that Tesla said that it will not only invest $ 1.5 billion in bitcoin but will also start accepting cryptocurrency as a form of payment.

What's In The File?

"We expect to start accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and on an initially limited basis," the Tesla securities file says.

Tesla said the company's $ 1.5 billion investment will provide "more flexibility to further diversify and maximize our cash revenues," the company said on Monday.


Great News for Gold Investors

However, the Tesla announcement is also great news for gold investors. The electric car maker announced that it has updated its investment policy to invest not only in digital assets, but also in gold and gold-focused exchange traded funds (ETFs).

It was announced that the new policy currently includes investment in "alternative reserve assets, including digital assets, gold bullion, gold exchange mutual funds and other assets."

Both Bitcoin and gold rose after the news on Monday morning.


What Do the Graphics Say?

According to Kitco's batch charts, Bitcoin set a new record of over $ 44,700. Meanwhile, April Comex gold futures were also last traded, up 1.20% at $ 1,834.80.

Bloomberg Intelligence senior commodity strategist Mike McGlone said Tesla's investment in bitcoin could increase Bitcoin prices to $ 50,000 and could be the catalyst behind the market value of bitcoin, which has expanded to $ 1 trillion.



"Tesla's announcement that he is investing in Bitcoin and accepting cryptocurrency for payment is a stepping stone similar to that PayPal bought in October, and in our opinion, points to around $ 50,000 as the next resistance target," McGlone said in a statement. Fear of loss may be a driving force, but the leading cryptocurrency is gaining global appeal as a reserve asset similar to gold, ”he says.

McGlone also said, “In addition to this, there is a decreasing Bitcoin supply. By 2025, the annual Bitcoin supply rate against total unpaid coins should fall below 1%, ”he said.

A week ago, Tesla CEO Elon Musk told Clubhouse, an invitation-only voice chat app, that "it's a little late to the party" when it comes to bitcoin, and added:

“Eight years ago I should have bought [Bitcoin]… At this point I think bitcoin is a good thing. I am a BTC supporter. "

Meanwhile, Musk shared on Twitter about crypto-related topics, including Dogecoin, which rose 65% in 24 hours and hit a record $ 0.083745 on Sunday.



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