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The value of bitcoin rose tremendously by over $44,000 in February after Tesla announced in an SEC filing that it had purchased $1.5 billion worth of the cryptocurrency, giving it a market valuation of over $800 billion.

Opinion

Why is Tesla investing in BTC such a big hearsay?

Tesla, the hobbyhorse turned industrial-triumphant of Elon Musk, has always been successful in turning the heads of tech aficionados. However, by making a massive investment in the world of Bitcoin, it has mesmerized the whole world in a jiffy. According to a report, the organization has potentially invested around USD 1.5 billion in the market to diversify its enormous revenue. And, since the announcement, the overall rate of BTC has skyrocketed to USD 44,000 within a single day. It is expected to amplify even more in the near future as well.

But, why did Tesla make such a bold move all of a sudden, especially during such a financial crisis? Well, since the inception of BTC, Elon Musk has always supported it vocally. Moreover, over the years, he has also tried to endorse the same through social media and other platforms. So, now, he has decided to take the endorsement on another level by investing in it publicly. However, as per reports, that does not seem to be the only reason in this aspect. There is a lot more to it. So, be sure to keep reading the write-up until the end.

Why Did Tesla Invest in BTC?

The announcement of investing in Bitcoin was made by Tesla during their SEC filling. While going through the procedure, the organization had pointed out that the investment policy of the same was not flexible enough. Thus, it wanted to diversify it to reduce the risk of capital loss while maximizing the overall return of revenue.

As a substantial part of the same plan, the company said that it would attempt to invest in another asset, including the digital ones. Hence, in a way, the investment was not sudden at all. It was pre-planned and well-executed. So, after proper speculation and assessment of the market, Tesla decided to invest USD 1.5 billion in BTC.

The policy of the same depicts that the electronic car-making organization can hold the acquired digital asset either for a long- or a short-term period. Nevertheless, the news does not end here. Aside from it, Tesla has also suggested that it would soon begin accepting Bitcoin as a proper form of payment in the upcoming future.

The policy will be made after reviewing the laws regarding it. Hence, it might take more than a year for Tesla to implement it.

Investment Opportunities for Tesla 

During the initial period, Bitcoin was not really supposed to become an asset for trading at all. However, due to the extensive mushrooming of exchange platforms, it soon became a productive unofficial currency. Nonetheless, the volatility of the market has remained true to that of the current status of a traditional exchange.

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Due to this reason, the revenue produced from this platform can be quite difficult. However, during the pandemic period, the growth of BTC has been quite eminent to say the least. And, luckily so, the development in the rate of Bitcoin has followed suit in 2021 as well.

Moreover, as the world is returning to the normalcy status soon, the market might thrive even more during this year. So, in a way, the production of capital for Tesla can be quite pragmatic and sensible throughout the whole year.

Will the Investment of Tesla Have Any Effect in the BTC Environment?

The massive investment of Tesla in the world of BTC can, indeed, have a substantial positive effect on it. To begin with, the crypto investors and traders are considering the venture of Tesla to be ideal for institutional adoption of the same.

According to them, this particular step might prompt the other organizations in the market to invest in BTC as well. It, sequentially, can increase the value of the crypto market even more and help the tong-term investors on platforms like the Bitcoin Equaliser for years to come.

Secondly, the value of Bitcoin has already increased to some extent after the announcement of Tesla. So, it will get amplified even more, especially until the first half of the year. It might pose to be a chance for the newer investors who are considering getting into the market of BTC.

Thirdly, the trust if people on BTC will improve for the years to come. And, as per speculations, the extensive influence of Tesla in the cosmos of entrepreneurship will be the factual driving force behind it.

Elon Musk is also being credited as a successful endorser of BTC on social media platforms. It might be a red flag for the reputation of Musk as well. So, the investment might pose to be a double-edged sword for him and Tesla.

Should You Join in the World of Bitcoin?

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According to Tesla and other veteran investors, the market of Bitcoin will continue to be impulsive, even after the move from Tesla. There will be several associated risks available here, which might lead to capital loss and cash infringement. Therefore, to tackle the same, you will need to create a proper strategy for it. But, how are you going to create a stratagem?

You can begin your endeavour by creating an account on a demo platform. It will help you to try out new strategies without the risk of losing money. Most of these platforms tend to provide virtual Coinbase. So, there is no need to be worried about it. Aside from it, you will also need to learn about the current condition of the market.

For example, right now, the Bitcoin market is in a safe multitude. Due to the recent announcement from Tesla, the price of BTC is surging continuously. And, it might keep increasing until the month of May or June of 2021. Thus, it will be an ideal time for you to make your investment.

However, if you want to make the most out of it, then you will have to learn diversifying your capital. Once you have mastered it, you are all done to begin investing in the crypto market.

Conclusion:

So, this is the story behind Tesla investing in the market of BTC. Hopefully, it will help you out in your future endeavour.

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