Elon Musk bets on Bitcoin with 1.5B investment
Musk’s bet on bitcoin fosters the growth of companies that have already invested in cryptocurrency
The stocks of companies that have invested in bitcoins surpassed Wall Street significantly in 2021. They Boost Their Profits With Tesla’s $ 1.5 Billion Rate Poured Into Rapidly Growing Digital Currency.
Bitcoin price hit an all-time high of $ 48,000 on Tuesday, two days after Tesla said on Monday it had bought digital currency and would soon begin accepting it as a form of payment for cars..
A small number of bitcoin-related companies listed on US stock exchanges were also encouraged by the news that Tesla CEO Elon Musk, a fan of cryptocurrencies, has added bitcoins to the business process of the electric vehicle manufacturer..
Tesla’s Bitcoin purchase represents a marginal bet for the fast-growing $ 800 billion electric vehicle company. However, it solidified the digital currency’s growing reputation as a major financial asset..
In part due to the interest of institutional investors, the price of bitcoin has quadrupled over the past four months, well above all-time highs set in 2017. Some investors see it as a hedge against inflation..
Tesla rallied after Monday’s investment disclosure but dropped 1.6% on Tuesday, bringing it up 20% in 2021, up from 4% growth S&P 500.
Companies with much more significant bitcoin participation than Tesla than Tesla have also rallied after Tesla’s disclosure, boosting the already significant gains in stocks fueled by the recent cryptocurrency rally..
MicroStrategy, whose CEO Michael Saylor is an avid bitcoin bull, up 22% on Tuesday, bringing its profit to over 50% this week, and is up more than 200% in 2021, more than $ 3 billion, equivalent to over a quarter of its market value in the amount of $ 11.8 billion.
Canadian financial services firm Mogo, which said it will invest up to C $ 1.5 million in bitcoin in December, jumped 45% on Tuesday, bringing profits since Tesla’s announcement to 85%, with a market cap of $ 318 million..
Payment company Square fell nearly 1%, leaving a gain of 19% in 2021. Square said in October that it bought 4,709 bitcoins for approximately $ 50 million, which is about 1% of its total assets at the end of the second quarter of 2020. These bitcoins are now worth over $ 200 million..
The value of Marathon Patent Group, a bitcoin mining company that announced the purchase of nearly 4,900 bitcoins for $ 150 million in January, jumped more than 60% this week and up 260% since the beginning of the year..
US-based payment company PayPal Holdings joined the cryptocurrency market in October, allowing customers to buy, sell and store bitcoins and other virtual coins using their online wallets. Its shares are up 21% in 2021.