Tuesday, February 9, 2021

Bitcoin Hits $47,500: Is Tesla Creating a Deluge of Corporate Adoption?

After Tesla’s announcement of its $1.5 billion purchase of BTC, Bitcoin gained a massive percentage in the last 24 hours. The pioneer cryptocurrency surged 22% to a new all-time high of $47,500 a few hours back.

At 8:58 GMT on Tuesday, the coin was trading at $47,056, a 20.61% gain over the last 24 hours.

Just a few hours after Tesla’s announcement, BTC moved past Tesla’s market valuations. The question to be answered after Tesla’s $1.5 billion BTC purchase is: will corporate America follow suit?

Speculations about tech giants

There is already speculation that big tech giants like Amazon, Apple, Microsoft and others will adopt BTC and may put part of their cash treasury into BTC.

Predictions about Apple are already ripe. The publicly traded company worth more than $2 trillion could single-handedly make the US a global crypto leader.

Mitch Steves, an analyst at RBC Dominion Securities said:

Apple could immediately gain market share and disrupt the industry.

According to Steves, such a development could allow Apple to unlock a “multi-billion dollar opportunity with a few clicks.” This seems to be a viable idea since Jack Dorsey’s Square earned over $1.6 billion in revenue from Bitcoin in the third quarter last year.

If the top-four tech giants put in 10% of their cash reserves, we could see a potential $50 billion corporate investment into the king coin.

What makes this all the more plausible was last week’s MicroStrategy conference, the World 2021 conference, with over 1400 companies in attendance. CEO of MicroStrategy, Micheal Saylor, who has been a big advocate for corporate investment in Bitcoin, shared his Bitcoin Corporate Playbook during the conference.

Commenting on Tesla’s purchase, Saylor noted:

Tesla $TSLA has de-risked the acquisition of #bitcoin by public companies and accelerated the digital transformation of corporate balance sheets. Treasurers are now thinking about how to convert a non-performing asset into the best performing asset.

Industry players think adoption will grow

Among the top ten global companies, Tesla is the first to increase its exposure to Bitcoin. With this, players in the industry are now positive that BTC adoption will only grow.

Fundstrat Global Advisors including David Grider said:

We see fundamental reasons for corporate crypto treasury exposure and expect others to follow suit. We don’t think this happens overnight, but we do think there’s much more room for corporate treasury penetration and expect the trend to continue.

However, it seems that this adoption may be limited to tech companies for awhile. James Angel, an associate professor at Georgetown University thinks that Bitcoin is just ‘too risky’ an asset. Angel said:

Corporate cash managers are generally quite conservative and invest corporate cash balances in safe liquid assets. Bitcoin is highly volatile and can easily go up or down 10% in a day or 50% in a year — certainly not a good short-term store of value

If you have any questions and comments on Bitcoin today, use the form below to reply.

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source https://www.earnforex.com/commodities/bitcoin-hits-47500-is-tesla-creating-a-deluge-of-corporate-adoption/

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posted by Allocated Industries @ February 09, 2021