Tesla’s 10K filing reveals they have invested into bitcoin and have a position valued at about $1.5 billion. Bitcoin and Tesla are up today on the news.
Tesla was up 2% to $870 per share. Bitcoin was up 13% to about $44000.
Tesla also announced they will soon begin accepting bitcoin for payment.
SOURCES- Tesla
Written By Brian Wang, Nextbigfuture.com (Brian owns shares of Tesla)
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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It is weird but housing isn't that vital.
The common people made the mistake of buying stocks. And they bought it on margin. Just like they are doing now with Robinhood.
Paper money has no inherent value, that is why it becomes increasingly worthless over time as more dollars are printed. A dollar is only worth what you can get for a dollar.
Bitcoin has value because it has usefulness to people who use it or to people who use it as a store of wealth.
Because the only way to get stagflation is an oil shock and FED pumping?
Why not generalize that to "vital commodity shock" and FED pumping.
(looks at housing market)
"Inflation in stock prices does not affect the common people."
Great Depression bubble bursting, .com bubble bursting had no knock on effects for "the common people" because they live in a parallel dimension?
I think thats part of the problem here, so a couple generations from now, we’re going to be pining at who got in years ago.. long term there is no viability.. if you think people will still be using this in 2050, I think thats sort of unreasonable. I dont think the internet and its experience will be the same in 40yrs, likely the entire infrastructure and its organization will be replaced entirely. Its a short play. The entire software and hardware infrastructure will be in a different place in 45yrs
Problem with been a gambler is that if you keep rolling the dice your luck can change for the worse.
A simplification. There are two economy. The first one is the economy of bidding up the prices of limited resources: stocks. commodities, real estate. The second, buying products and services with are produces or provided by people. The first economy does well when rich people have most of the money. The second economy does better when the common people have money. So, you have to figure out how much you can bleed the cows before they keel over dead.
No, the rich can't have 100% of the nation's income. The rich will consume little and bid up the price of everything that is valuable.
$1.5 billion can become the tail that wags the dog. As I was saying large swings in its worth can obscure the fundamentals of Tesla business making large investors nervous.
For real. We gave the top 1% a pretty big tax cut. Inflation decreased.
Inflation in stock prices does not affect the common people. It is basically a bidding war. As for homes, price increase isn't that bad. In my area, its gone down due to the cap on real estate taxes and mortgage interest rates.
I am curious, if no one had any money to spend how did this inflation happen? Inflation is basically too much money chasing too few goods.
Looked it up. Stagflation was caused by the sudden shock of an large increase in the price of oil coupled with the FED pumping large amount of money into the system.
The oil price shock isn't going to happen again so I wouldn't sweat stagflation.
Think of Bitcoin as a commodity. Ethereum is the smart fiat. You do pay taxes in $ on buy/sell transactions where a gain is had. Your gonna miss the bus dude[And I am not a Millennial]. Its here to stay.
I agree. They seem to be opportunistically investing in the Bitcoin, perhaps with the expectation that lots of inflationary stimulus by the US govt will naturally cause BTC to rise (so could gold & other precious metals, for that matter)
Is this kind of calculated stuntsmanship a demonstration of agile opportunism, or just a distraction from their core business goals? It's an educated bet, but still a gamble. I've noticed that Musk does seem to be a gambler, and his choice of business ventures seems to reflect this.
In a normal world, exposing your company to such insane currency risk will sunk its stock price. Apparently we are not in Kansas anymore.
Further; what’s overlooked with all these cryptocurrencies and why the dollar will stand the test of time is what underlies their values beyond any possible inflation or deflation, and that is the laws and values of the nations that governs its issuance, and the legal systems which protects its use. Really beyond that, bitcoin is a resource wasteful temporary holding strategy currently to avoid paying taxes on financial trades. Its will shine for a little then come crashing and burn hard. Thats it. But its set up like a pyramid scheme, tbh. Rough times are ahead.
Could be that the general public doesn't think of bitcoin as any sort of anti-green thing, so it doesn't affect Tesla's image at all?
Did you just commit the time-worn Scrooge McDuck fallacy? Assuming that rich people just pile all their money in a big vault and occasionally frolic around on the cash, with or without nude models depending on preference?
Rich people spend money, that's what they want it for. Now they may spend it on stuff like real estate or company takeovers or purchasing senators, and less on stuff like cool new tattoos dude, or cheap beer.
But that just means that your inflation will take the form of soaring real estate prices and Senators having 10 times the money their salary should support, instead of 5 times. Then that flows into the economy and should eventually settle down to overall price increases.
Purchasing the assets and never reporting it would definitely be illegal. They have to announce whatever they are doing in their quarterly reports.
I agree with your analysis.
Transaction times for the BTC chain are slow and variable.
I think this is why most new crypto apps use Ether.
Bitcoin is the bank. Ether (et al.) is the cash register.
Even after the last coin is mined, the existing coin (21M) will continue to be traded. Miners will profit from the transactions.
Me too. Except that I got in for about a grand.
Going long on DeFi next. I think the market has legs now.
I honestly think this is all disgusting. Bitcoin has no inherent value, and its mining lobbies toward the fact that its a worthless currency beyond any standard. Musk taking a position of protecting the environment and then embedding himself in such a wasteful production of fake currency is hypocritical to say the least. Its monopoly money and people will get hurt.
Thanks Elon, I guess. My paltry ‘for fun’ investment jumped about a buck and a quarter yesterday.
They should really use a proof-of-stake currency instead. We don't need to waste all that energy anymore to make a viable cryptocurrency.
1.5 K million are peanuts for Tesla, which is valued approx. 200 times more than this investment in BTC. It is not reasonable to think that this will make the bussines performance cloudy.
Maybe they should heat their homes with Bitcoin mining rigs.
I'd have thought that for any public company, purchasing a $1.5B in assets and NOT revealing this would be illegal.
You have to reveal your financial position and announce any changes that would materially affect the company position.
The last bitcoin is estimated to be mined in 2140…
Also, there's a transaction fee that gets paid to the "winning" miner – basically those who want to do a transaction include a bid to get included in a block by a miner – so mining can theoretically continue to be paid after there are no more coins to mine.
So those aren't really problems for Bitcoin.
I'd say its biggest problem is that it is very hard to update its protocols, and its protocols are obsolete, inefficient, extremely limited in speed and functionality. Though those are also things that convince people it has value (well established, expensive to implement, exclusive (only so many transactions per day), limited supply, etc). I still say it is a scam – it's just a successful scam like fiat currencies.
Don't be silly, they're not hedging against USD. They're diversifying and hedging against the belief system that is Tesla stock with another belief system popular with the same devotees.
When did rich people own their own power plants?
Tens of millions of tons? Wow compared to the 35 billion tons of CO2 emitted each year? Sounds like a rounding error.
Some people think that making it difficult to produce more money is a good thing.
They already do. You can't profitably mine bitcoins anymore without custom ASIC chips. But miners are in an arms race with each other so it doesn't actually reduce energy usage.
the value of money is decided by people who use it to trade. so if people realize the dollar dept, and use something else, it wont decrease the dept but it be more like úp yours gov, we're not falling in your traps. countries with weak risky balances are likely to adapt bitcoins to get out the lure of goverments and their banks. To be able to set some money apart for later when they get older you need something that keeps its value acka crypto. (if indeed it will do that, if people dont want it, its worthless).
2027 the last bitcoin is mined, …
Ad now what is its value?. things get sold by fractions of bitcoins.
But do fraction really work?, and after 2027 who wants to validate transactions ?
You know that high gpu demand part of mining, the transaction cost may become so high thats its not practical for daily use. Then what happens ?.
(the date 2027 is fictional, its something in the near future though)
its even better you cannot simply print extra coins, yes you can farm them but at an increasingly high cost by difficulty as in gpu resources required. America's depth is growing extra dollars are thus printed, its an insane depth this cannot happen with bitcoins, countries with weak balances (like the USA) hang on a tight string of 'trust' and 'believe', 'trading deals', military power.. if China would like tomorrow the dollar falls. Instead they invest in crypto and let the dollar dye slow which is in the best interest of all countries. Elon will not await that day. And i wouldnt be surpriced he was deeply involved into the beginnings although he always denied that… (didnt had some bussines with digital money in his past, nah just ignore that he understand money).
Yes I agree. This is a fundamental flaw in the currency. Those who are rich can simply emit tens of millions of tons of CO2 to get richer. An absolute global menace.
The Musk has got into the business of profiting from buying and selling stocks and currencies and then making announcements favoring their trades. This is taking your trade mark to the limit when you know that some of your psycho fans will celebrate it as their personal achievement.
"Inflation will never happen as long as the people who spend money don't have any, aka, the poor and middle class."
So if we print $10 trillion and give it to the top 10% there will be no inflation? For realz? If I can haz moniez without consequences will you please give me said moniez? Why not?
We already have inflation in stocks, housing, and BTC. Those are the things that the well to do buy with their extra moniez and historically low interest rates.
To summarize, "One does not simply inject trillions in to the economy".
"As long as wages are stagnant there will be no inflation."
Oh man that isn't close to true. Stagflation: persistent high inflation combined with high unemployment and stagnant demand in a country's economy. When unemployment is high wages are stagnant.
Maybe the occupants of 'Switserland' should turn the heat up.
Maybe Tesla will get in to Gen IV reactors. For BTC! Also For Mars!
Maybe making EVs isn't a green industry.
I suppose if they accept BTC then they repay BTC it a car is a lemon? That I suppose would require having some BTC on hand.
Exactly my thinking. Governments are going to milk monetary prima nocta for all it is worth. Expect gov to get aggressive with crypto.
"So when do you think inflation is going to be higher than 10%?"
Never because interest rates won't be raised. My suspicion is that most national currencies will die before central banks intentionally raise interest rates to a level where they enter in to a debt interest rate trap.
So when do you think inflation is going to be higher than 10%? People have forecast that it would be any day now for 30 years and so far they have been wrong. Inflation will never happen as long as the people who spend money don't have any, aka, the poor and middle class. As long as wages are stagnant there will be no inflation.
Maybe some Semiconductor company should invent a chip that can mine bit coins energy efficiently.
Money is printed by every nation. The value of money is determined by how much you believe in the nation that prints it. Once upon a time ago large financial companies used to print their own currency. I guess bit coins is making that possible again. But many countries are not going to like losing their monopoly in printing currency.
Don't like it. Its a speculative move which has nothing to do with their core business. The worth of the bit coins can swing all over the place making the company's business performance cloudy.
Crypto has never been accepted as a security.
Do the Feds even have an interest here?
Weird choice for a company with such a green image. Daily use of energy to mine bitcoin has surpassed the energy use Switserland.
If government currencies are going to be deprecated by crypto may as well use up their remaining credibility.
How is your scenario any different than a stock investment buying Tesla and then telling people they bought Tesla?
Oh right, it isn't and it isn't illegal in the slightest.
I am not protecting the hedge funds practices, however if Musk twits with rocket raising over bitcoins where after he bought 1.5B$ and before he told every one he is invested in bitcoin and talking from position, then its mark manipolation.
So printing us dollars and making money out of nothing starts again. Dollar will go down on value.
If other countries foreign exchange reserves are in dollars and only Us can print dollars, value will decrease for all, but Us will keep its profits-they print it for themselves, so unfair.
it is like if i started my own currency and almost everyone else uses my currency for their cash reserves, but only i can print it. So when I print it for myself everyone loses because value deflates(so much extra printed money). Except me who profits from printing it and making money from nothing.
We are seeing the consequences of the economic illiterates in Congress printing a fresh $1.9 trillion to motivate teachers unions to push their members back to work.
Life is going to be hard for Congress critters when US scrip isn't useful. They may have to actually figure out how to not spend more money.
Good start.
LOL I'm sure the SEC will get right on that. It isn't market manipulation, it is what every single hedge fund and investment fund on earth does- buy something and then hop on CNBC to tell everyone what you did to build momentum.
The only difference is that Musk doesn't hop on CNBC and provide some eyeballs for the people buying ads.
If Tesla bought thus bitcoins before musk tweets tp ramp it up. Than thats was probably illegal market manipulation.
He may get several years behind bars for that.