Tesla, the world's most valuable car company, has just announced that they will be allocating 8% (1.5 BILLION) of their liquid assets into bitcoin and will soon be accepting it as payment, according to an SEC filing.
Although this is the single largest corporate purchase of bitcoin, the implications span much wider than a simple bump in our bags.
Elon Musk has built a reputation for driving markets by simply tweeting about them. The most famous and recent case would have to be dogecoin, a cryptocurrency that was created as a joke in honor of the Shiba Inu meme. Regardless, Dogecoin is up 1380% on the year and the vast majority of that growth is due to celebrities, most importantly Elon, who have been posting memes related to the currency.
Dogecoin is a joke and everyone knows it. Bitcoin, although a joke to some wall street dinosaurs, represents the most legitimate cryptocurrency in the space. So what does this mean for mainstream adoption of Bitcoin? Well, immediately after the bombshell news, exchanges, such as Kraken and Coinbase, have been suffering from technical issues due to large amounts of traffic. A very good problem to have!
(side note, whenever an exchange is having “technical issues” it's normally because they are having a hard time handling heavy traffic, AKA lots of people are buying crypto!)
Laura Vidiella, who previously worked at LedgerX and is now the VP of Institutional Sales at Paradigm says that “growth and retail adoption has been bananas. Only in January at LedgerX the user base grew by at least 30%”. On February 9th, more than 52,000 contracts traded on LedgerX and the most active contract was the $50,000 call option for February 26th, trading 7,587 times. Now with the big news from Tesla, she mentioned that she could only imagine the retail adoption that lies ahead.
The implications are clear, Elon is not only triggering more institutions to buy bitcoin, but he is driving mainstream adoption! So now that Elon is not only endorsing bitcoin but putting his money where his mouth is, things look to move very quickly in the crypto space!