Analysts said the move by one of the world’s best-known companies was liable to prove a game changer for bitcoin.
The worlds largest crypto currency was up 12% in morning trade, setting a new record high above $44,000. The Grayscale Bitcoin Trust was up 13%, its highest since mid January.
THOMAS HAYES, MANAGING MEMBER, GREAT HILL CAPITAL LLC, NEW YORK
“It’s saying that Elon Musk believes that buying Bitcoin will grow faster and generate a better return for his shareholders than buying Tesla stock. In my view it’s not a tremendous vote of confidence in Tesla stock.”
“Now, he may see what MicroStrategy did and the market started to play the MicroStrategy stock as a proxy for Bitcoin and it attracted flows so there might be a clever play like that.”
“It’s a huge vote of confidence for Bitcoin there’s no question about that because now other companies will start to look at if Tesla is doing it, should we allocate some of our cash into bitcoin?
“If any lesser mortals had made the decision to put part of their balance sheet in Bitcoin I don’t think it would have been taken seriously.”
“But when the richest man in the world does it everyone has to take a second look there’s no question about it.”
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH MANAGEMENT
“This just highlights its (Tesla) ability to show that it is just that much more technologically sophisticated than other companies, that it is willing to accept this relatively new form of payment in exchange for a luxury automobile.”
“It sort of elevates (Tesla’s) stature in the minds of people who are drawn to its products. If you are drawn to electric vehicles and drawn to Elon Musk then taking in Bitcoin is just perceived to be as just so much ahead of the curve.”
“Musk getting involved in Bitcoin, to those investing in Bitcoin will be used as a way to tell others that this is a real asset, you can actually do something with it, they will support it as an argument of being the way of the future.”
“It is just another reason to point to the asset and say ‘even the richest guy in the world accepts this form of payment.’”
ARNIM HOLZER, MACRO AND CORRELATION DEFENSE STRATEGIST, EAB INVESTMENT GROUP, PHILADELPHIA“While the fervor in Bitcoin isn’t devoid of correlation to speculative enhancement, there is fundamental basis to the concern that fiat money may simply represent too great a share of future liability and not enough asset or growth composition. As such FX has a component of trying to see how many trillions of dollars of trading volumes can balance on the head of a pin. In that light, the Tesla Bitcoin announcement is more a symptom than driver.”
NORDINE NAAM, STRATEGIST, NATIXIS, PARIS
“This is positive news for digital assets. It confirms the growing interest and confidence of important economic players in Bitcoin. This follows the trend observed since Microstrategy, PayPal etc. in the acceptance of cryptos. Therefore, it contributes to the maturity of the market even if it is still very volatile and today’s rise is probably the result of speculative flows playing on the news. In any case, Tesla will probably set an example for other large companies and this could strengthen Bitcoin in the future”.