Tesla (TSLA) said it invested $1.5 billion in bitcoin (BTC) and will allow customers to buy cars using the digital asset.
The move also opens up another way for people looking to invest in bitcoin – via ownership of Tesla stock. The stories circulated over the last few months about the people who may technically be millionaires but are locked out of their gains due to lost passwords, illuminated some of the difficulties of assets secured with cryptography.
This is one of the main tradeoffs for bitcoin: It may be a clever system, valuable, and groundbreaking, but it also has a learning curve. There are platforms that make investing easier, but bitcoin evangelist and Fundstrat founder Tom Lee points to companies like Tesla as another option. If you don’t want to own bitcoin, you can buy stock instead to get exposure.
MicroStrategy and its CEO Micheal J. Saylor are probably the most notable bitcoin bulls putting their money where their mouth is when it comes to their treasury. After putting in slightly more than a billion dollars in USD into bitcoin, they’ve seen that amount close to treble in value in a few months. MicroStrategy is a business intelligence company that is listed on the Nasdaq NDAQ -0.9% Index.
Michael J. Saylor is an interesting convert to bitcoin — in 2013, he had tweeted about how bitcoin reminded him of an online casino and that its days “were numbered”. Now, however, he has become a strong advocate for bitcoin. Shares of his company have now increased significantly in value as a result.
COVID-19 helped accelerate a number of digital reforms in companies large and small.
“We’ve seen two years’ worth of digital transformation in two months,” Microsoft CEO Satya Nadella said back in April.
Cryptocurrencies and blockchain have been part of that transformation. The companies utilizing these technologies run the gamut, from traditional financial powerhouses looking to develop their own cryptocurrencies, to fintech firms looking to add Bitcoin functionality to their products, to other companies using blockchain to improve their operations.
Bitcoin might not be right for many investors. In addition to not being able to buy it directly through a brokerage account, it might simply be too volatile for some.
“Cryptocurrency investing today is a bit like living in the early days of the 1850s gold rush, which involved more speculating than investing,” says John LaForge, Head of Real Asset Strategy at Wells Fargo Investment Institute.
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