Topic: Tesla Bought 1.5 B in Bitcoins - page 12. (Read 2740 times)

Right now, we can all go prepare the popcorn, sit back and watch the bulls go wild in the market! 

It is impossible now for bitcoin to go below that price. $30k is only the lowest it can go for me and that would already be considered a big crash, many people will surely buy this time.

There's now a rumor that Apple will also invest in bitcoin but they have not confirmed it yet. If this happens, it will definitely drive bitcoin's price to $50k easily.

https://www.zerohedge.com/commodities/apple-about-announce-5-billion-bitcoin-purchase-one-bank-thinks-so?

We are both, I also thought he was not serious and I believed in the rumors of others that he was just doing trolling.  But no, this is true.  This is the real reason for the surge in Bitcoin price.  Some days I immediately check his latest tweets when I read posts about him.  After hitting the new ATH of $ 42K, here is the latest sitting in the range of $ 45K- $ 46K.  Most likely, at any time it will continue to rise.  It just seemed to shake the whole community because of the massive Bitcoin news this month.  I will not say first for this year because there are many more months to go and there is a good chance that there will be more to follow in their footsteps.

Thanks to Elon Musk...

Elon is a very weird person first and foremost, and he reminds me of Donald Trump a way -- someone that's unpredictable and uses twitter a bit too much.

Anyways, the clear implications are that Bitcoin is slowly but surely becoming mainstream, as if it wasn't already. Tesla isn't the first corporation to incorporate BTC into their assets, they won't be the last. As much as everyone enjoys the price of BTC skyrocketing, it's important to note that a 20% increase was basically caused by a single entity, a quirky billionaire with an overvalued car company who decided to buy an inconsequential amount of Bitcoin - and you would be naive to believe that this sort of mechanism cannot be used in reverse whether it is elitist manipulating the price or governments tampering down with regulation. In fact, we recently saw Nigera bank try to ban the use of Bitcoin country wide. Nigeria is a nonfactor in the global economy, but imagine something bigger, like the US restricting free Bitcoin trade. I can already imagine how the government would do this -- just tax it. Every time you send Bitcoin, you're forced to pay taxes on it. Every time you make a transaction, tax it. They'll begin forcing you to report your Bitcoins to the IRS regardless of whether you're holding or not. And from there? Just implement a wealth tax. Whether this would be feasible wouldn't be the point (because ofc the IRS can't track every Bitcoin transaction, identify the owner of the transaction, and force them to pay some sort of tax), but the effect of this would be less Bitcoin ownership, trading, and therefore a lower price. Objective complete, and the US government didn't have do too much. A last point, the US -- one of the largest economies in the world (perhaps 2nd behind China in some metrics) is on a printing frenzy of money that will inevitably cause USD to lose its value. The US is on the losing battle to crypto because of unfettered spending meaning USD will have to compete with crypto at some point or another. This means crypto will increase in value, but this also means the US government can pull strings to shift the battle in their favor. Do not underestimate how desperate financial institutions are to keep grip on the capital.

This is not meant to fear monger, just something to keep in mind. We can celebrate the short victories, but be careful of sudden growth because it can go back the other direction, and it's important to not get discouraged. You should be involved in bitcoin for the marathon, not the sprint.

That's the problem, Tesla doesn't have excess cash.  The company is asset rich, and cash poor.

This strikes me as Hail-Mary, fittingly executed on Arm-Chair-Quarter-Back Monday.  It's a brilliant strategy to break the news while Twitter is abuzz with all the Super Bowl talk.  Musk has already witnessed what his celebrity status can do to cause crypto to pump.  I wouldn't be surprised to see 1.5 billion dumped from the market before tomorrow morning.  I hope I'm wrong, but if nothing else Musk strikes me as an opportunist first and foremost.

Tesla also plans to accept bitcoin as payment method and that's for sure gonna increase the mass adoption and if tesla just bought 1.5 Billion dollar worth of bitcoin don't you think it will trigger other large corporations to atleast adopt bitcoin to their payment method aswell? it also could acts as a foundation for bitcoin so the price won't go below $20K.

Much WOW, it finally happens! Pun intended.

All along, I was thinking Elon is no dead serious on Bitcoin. I thought he was just playing it out with all those Bitcoin memes, Bitcoin Twitter profile, and so forth. I have to admit I even thought Elon was somehow annoyed with all those Bitcoin shills bugging him to get into Bitcoin. I asked myself, why should Elon bother about Bitcoin when what he's been happily doing all this time is making him the richest man on earth?

Well, I was wrong and am very happy to admit it. Mars, here we come!

Now that Tesla officially announce this one, I'm confident that many big companies will do the same thing though I believe they started buying Bitcoin since then, this is still a great news and hopefully no government will restrict any companies from holding Bitcoin, we'll see. After this announcement Bitcoin made its new all time high and the trend is not done yet, I have a strong feeling that 2021 will be the year of bull market and we might not see a bear trend for now.

While I agree with some of your points, how is it smart for Apple, Tesla or any other company to keep
a lot of assets in cash with the current inflation and risks?

If there is no room for growth right now to sell your cars and high risks from inflation, it is actually in the
best interest of your shareholders that Tesla is prepared for the future and that means spreading their
assets and minimizing risks.

So that when they see a market again to sell a lot of their cars, and to open a lot more factories,
they can create jobs again, be more productive and reach a higher market share thru their products.

Had Tesla converted parts of their assets to Bitcoin already in 2019 or before, I think we all can
agree their investors would be jumping around in joy right now.

Apple for example is also investing in various assets, like the worlds biggest venture capital fund.

Well,
first of all a disclaimer:  all that I am going to write is meant to be read through the eyes of the TSLA investor, not the bitcoin supporter writing on bitcointalk.org.

TSLA has 20 billion in cash&equivalent. This is not much for an 820 billion company. AAPL, for example, a 2.3 trillion company, almost 4 times bigger, has 195 Billion in cash&equivalent instruments, almost 10 times more. Basically, TSLA is already, or various reasons, but mainly for the early stage of their business cycle, a cash-strapped company. The objective of a good treasurer is to optimise this amount, having in mind the future cash flows of the company: finance for this kind of companies should always be ancillary to the core operations of the firm.

For example, this is something I am not sure happened with Microstrategy, that issued a subordinated bond only to invest in Bitcoin the proceed of such sale.

I think that for TSLA, investing 1.5billions is really the minimum amount to be considered as an investment. Today TSLA gained 1.31%. This equates to 7 billions of dollar growth in market capitalisation. This is an amount 8 times bigger than the potential loss of bitcoin going to zero and they holding the whole investment.

From what they have written in the filing, I guess that, contrary to Microstrategy, their investment for sure is for "ideological reasons", but mainly as a way to enhance the treasury management, and having a better yield on their financial performance. I am ready to see them selling when in needs to finance their next giga-factory or the ramp-up of a new model.

Similarly, the potential negative effect of the volatility of BTC price fluctuation on the TSLA shares would be negligible. First of all because even if Bitcoin had a surge in volatility, this would affect only the 0.2% of the market capitalisation, secondly because TSLA already exhibits higher volatility than bitcoin.

I think this covers only the downside of Bitcoin investing, leaving out the obvious upside of a BTC appreciation.
Due to this very asymmetric payoff, I think the move TSLA made is absolutely prudential and organic to share growth, without putting anything at risk.
This is something very different from what I am seeing being done at Microstrategy (where a very different ownership structure allows Micheal Saylor doing, basically, everything he wants with corporate, money).

It's amazes me how more and more people, prominent figures at that matter, are supporting bitcoin by advertisement or buying it, one by one. And now we have Elon, who has always been vocal about his support of bitcoin and cryptocurrencies in general, buying what I can say is a crapton of bitcoins. This purchase will definitely boost bitcoin, not only in terms of price but most especially to those who still have second-thoughts purchasing it and adding bitcoins to their portfolio. As if there's any more BS that can be thrown to bitcoin now that it has reached this high a price point. It's price will become its own statement of how strong bitcoin is.

I've had at least 50% of my net worth in BTC continuously for 8+ years. Bitcointalk.org has always existed as much as possible purely in the crypto economy, with 100% of the forum's income being from cryptocurrencies over all of its history. I think that there is a decent chance that Bitcoin will be the next world reserve currency. So I'm nothing if not a Bitcoin true believer. But all that being said, if I was a Tesla shareholder, I would be annoyed.

Tesla is a car company, not a hedge fund or some ideological tool of its executives. To the extent that it does any speculation, it should be in the realm of car production. It should be using excess cash to build factories, hire more people, and stuff like that. If they think that they have more cash than they can usefully spend on that kind of business investment, then they should return it to shareholders through dividends or buybacks. But in the second half of of 2020, Tesla issued at least $10 billion in new TSLA shares. This basically means that they took $10 billion from existing investors by reducing the value of their shares, and now they're using a big chunk of this money to speculate on a very volatile asset. If TSLA shareholders wanted to invest in BTC, they could've done that themselves: they don't need Elon Musk to take money out of their pockets and do it for them.

Now, it could make sense for a company like Tesla to hold BTC, but only for reasons unrelated to speculation. For example:
 - If the dollar was at risk of imminent collapse, but Tesla needed to store value to cover short-term, non-dollar-denominated expenses, it might make some sense to move some of their short-term cash to BTC. There are way less risky ways to hedge against inflation, though, such as through derivative contracts on the commodities that they need or on the TIPS breakeven.
 - If they were having difficulty transacting via the fiat financial system, they might need to hold BTC. It makes sense for cannabis companies to hold a lot of BTC, for example, since the fiat financial system is useless to them.
 - If some of the people they pay would prefer to receive BTC instead of fiat, it might make sense to hold some BTC to cover these expenses.
 - If they wanted to do something that only BTC could do, like some sort of smart contract thing, then it would make sense to hold enough BTC to do that.
 
But I don't think that Tesla actually has anything like those reasons in mind, or at least not significantly. It looks to me like they're sitting on too much cash, Elon likes Bitcoin for mostly ideological reasons (which I agree with!), and so he decided to throw a reckless amount of Tesla's cash at BTC. If Elon wanted to put his personal money into BTC, I'd be all for it, but this just doesn't seem responsible for the company to do. That said, Elon holds the majority of TSLA stock, so in some ways it's not really anyone else's business what he does with the company, though I view this kind of reckless management as unprofessional and outside of the expected behavior for the CEO of a public company. This action (and others) makes it clear that Elon views Tesla as being unlike other public companies, and instead basically an extension of himself to which he's giving other people the opportunity to hitch their wagons, come what may.

It is very bullish for BTC. $100k this year doesn't seem impossible to me anymore. But this is part of a trend of there being way too much money floating around in the system. BTC is getting swept up in the asset bubble of all asset bubbles. There's a high risk IMO that everything (stocks, real estate, BTC, etc.) will come crashing down, though probably not for 6-18 months. It's also possible that this bubble resolves itself through inflation (probably many years of stagflation rather than hyperinflation).

I haven't decided yet whether I think that this asset bubble could possibly be more-or-less maintained without inflation. Could the S&P go up 15% this year and BTC double, but without any subsequent huge crash or substantial CPI inflation? It's difficult for me to believe, but maybe? What would that even mean for the whole concept of assets, wealth, and value?

It's also always possible that BTC will crash. In particular, the higher the price gets, the more likely it is that governments see BTC as a high-priority threat that they need to take out of the picture. It's not easy to make Bitcoin technically unusable, but there are probably actions that the Biden administration could unilaterally take which would crash BTC to sub-$5k, for example

The real world test drive to see what bitcoin to the world of finance starts officially today! Follow the money they say, and we now know that only the brave put their money where their mouth is. As cr1776, wrote somewhere else, let the money talk. Allow BS to go away!

That's right, many companies surely will follow to get on the train atm. not only that, the governments will surely overheat to see this news.  get ready for the next bulls and also the next strict rule from the government (who may be annoyed by this news) "lol"

Nice series of events!

Yes, Musk has been hinting on this the past few weeks and even said that he has to be careful with what he says because he 'can move markets' which is undeniably true and proven from dogecoin's performance lol. Just previously he had the word '#bitcoin' on his twitter bio so it was pretty much expected.
This is very big news and I'm confident that this brings good influence to the crypto community. Who knows which company will go next? Others will surely follow and wouldn't want to miss out on this. Binance crashed just moments after the announcement came out (not sure if its related or coincidental technical issue) but my guess is many wanted to jump on the train after seeing this Tesla news.

Good reason for pump and nothing more as for me. Im sure, that was the point of this purchase for tesla

Cash is of course part of the market cap. If Fillippone Inc is a firm with nothing else than 150,000,000 in the bank account and  100,000,000 of shares, the exact price of each share is 1.5 USD.

Of course regarding TSLA is the amount of free cash in the bank they had available to buy Bitcoin of course, I am researching on this, as TSLA I know is quite a cash stripped firm.



I think this news is by far the most important news in a long time, by far more important than PayPal. (I don't know if your "after Paypal" is meant on a chronological or importance order).
This is because not the effect on other CFO is they cannot ignore anymore the BTC option for their investment. One thing is a semi-obscure MicroStrategy share. Now we are talking about Tesla, one of the most knows brand in the world.

@fillippone, I think this after PayPal is perhaps the biggest news if we look a little wider than the amount in question. You set up a really nice chronology that started there sometime around December 20 last year when Saylor give Musk a little advice to invest $100 billion in BTC. At the time, at least according to Musk's answers, it seemed that everything would stay on a few EM-style tweets - but as we can see now, Musk seems to have taken the message from the MicroStrategy CEO very seriously.

What I mentioned at the beginning of the post is actually the fact that Musk will now very likely take on the role of BTC ambassador and advise others to do the same as he did - and I think his influence is far greater than anyone who was pro-Bitcoin so far.

I think they invested their "cash", not necessarily part of their market cap which is stock price. So that 1.5 billion could be more than 1% if they have below 105 billion sitting around as liquid cash / treasury.

This would also imply, Musk himself might be holding some actual coins personally (probably in custody with one of the exchanges that service institutions, but could also possibly be self-custodied with a private tech team that works for him.)

*TESLA INVESTED TOTAL OF 1.5B IN BITCOIN UNDER NEW POLICY

https://twitter.com/siamakmasnavi/status/1358786537928986625?s=20

If Tesla, one of the most known brands in the worlds, invested 1.5% (conservative amount, as we saw above) of their funds in Bitcoin, how any other CFO will justify their choice not to invest? This is just the start of a snowball effect.

They already bought those Bitcoins. If they followed Microstrategy Playbook they bought on exchanges, namely Coinbase, in the past days. This might be related to a large Outflow on Coinbase we say in the past days :


15K Bitcoins are roughly 35% of the 40K  what should be the ballpark of TSLA Bitcoin investment.

On another thread I was asking myself how the price of Bitcoin was so resilient even lacking Grayscale buys. This explains who filled that void.

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Of course not everyone is fan of this move:




He's of course in Denial mode:


https://twitter.com/PeterSchiff/status/1358785092613734406?s=20

Vitor Constancio, former ECB's vice president, doesn't like it too.



https://twitter.com/VMRConstancio/status/1358853965744664579?s=20

His 20 tweet long rant, is actually quite interesting.