It was inevitable that’s all it took to send the markets into an instant frenzy that saw the value of bitcoin spike by twenty percent in just two hours and that’s before new york city had even woke up. So what is this all about, and whatever it is? Was it really inevitable? Hey elon knights, welcome to the tesla space, where we share the latest news, rumors and insights into all things, tesla, spacex and elon musk. If you enjoy the content, be sure to subscribe and smash the like button down below disclaimer off the top. This is not a crypto channel and most of you probably know as much or more about bitcoin than i do. There are some great resources out there to get a detailed explanation, but in short, bitcoin is a digital currency, unlike your bank account or your stock portfolio. Bitcoin is not tied to any physical asset in the real world. Bitcoin had its heyday as a currency used to buy and sell back in, like 2011 to 2013 era of the dark web and the silk road. This was basically ebay for drugs and the only payment option allowed was bitcoin. The silk road was shut down, but bitcoin carried on from this point forward. People weren’t using bitcoin to buy goods and services. They were buying bitcoin as an investment kind of like a stock, except without being tied to the rise and fall of any particular company or economy. If you own tesla stock, then the value of your share is tied to the success or failure of that company.
If tesla’s manufacturing plant explodes, then their stock value will drop like a sack of rocks, and so too will the value of your stock portfolio. Bitcoin is being viewed more and more as a digital version of gold and the analogy works, because both are rare commodities that cannot be created only extracted from the original source to obtain more gold. You either have to buy it at market value or break open the earth and dig it up. Bitcoin functions in the same way as you can only generate more of it through mining. Obviously, this is digital mining, not literal digging, so you don’t need drills and dump trucks, but you do need a gpu, the size of a football and, if you’re gon na make any real progress. You’Ll need a whole chain of these processors, which will require as much electricity as a small town to operate and, unlike gold, we know exactly how much is available to be mined 21 million coins and the closer we get to unlocking all of the bitcoins. The more processing power is needed to mine them and therefore the harder they become to obtain, basically, the more people who own and hold bitcoin the more valuable it becomes, because it also becomes more scarce. At the same time, if the supply is fixed, then the value is dictated entirely by demand. Hopefully, that makes sense i’m, not even going to get into blockchain or how bitcoin works or who made it to begin with that’s a rabbit hole for you to explore on your own, and i wish you a good journey but we’re a tesla focused channel here.
So what does this have to do with elon musk we’re getting back there, because we are now looking at who is actually buying bitcoin for the majority of the time between 2013 and 2020, this was mostly retail investors just looking to make money. People bought low, waited for the price to rise and then sold for a large profit. The sell offs would cause the value to drop back down again and the cycle repeated over and over again. This led to bitcoin’s, first major spike to nineteen thousand dollars in 2017, which was quickly followed by a major crash back to seven thousand dollars after everyone tried to cash out now we had seen similar spikes four years prior for bitcoin, but this was really the big One that brought it into mainstream media the only way bitcoin can maintain and grow its value over an extended period of time is if large amounts are bought and held indefinitely, not sold off for short term gains following the market collapse in the spring of 2020. Some very rich people and companies started to use this aspect of bitcoin to their advantage. As long as these ultra rich folks continue to buy large amounts of bitcoin and hold them as assets, then the value would be guaranteed to increase that’s, where this guy michael saylor comes in he’s. The ceo of a software company called microstrategy and he kind of started. This bitcoin revival by investing 250 million dollars of his money into bitcoin as a treasury reserve in august 2020.
, michael saylor then went around telling anyone who would listen, that bitcoin was superior to cash and it worked. Other institutional investors have been jumping on bitcoin ever since, and this caused the value of bitcoin to rock it back up exceeding its previous maximum of twenty thousand dollars by december 2020, and since then, it’s continued to go up significantly now that’s, where elon musk comes into The picture because in late december, elon and michael saylor had a very public conversation via twitter about bitcoin sailor wrote to elon. If you want to do your shareholders, a 100 billion dollar favor convert the tesla balance sheet from us dollars to bitcoins other firms. On the s, p, 500 would follow your lead and in time it would grow to become a one trillion dollar favor and to that elon simply replied are such large transactions even possible michael said. Yes, i have purchased over 1.3 billion in bitcoin in past months and would be happy to share my playbook with you offline from one rocket scientist to another. Now, obviously, elon didn’t need michael saylor. To tell him all of this. The richest man in the world clearly knows his it’s. The fact that elon was acknowledging this kind of investment in such a public forum that was such a big deal. Elon has had his hands in crypto for quite some time now, but he’s always shied away from talking seriously about bitcoin, which is ironic because when elon started paypal over 20 years ago, he and his partners had the intention of creating a decentralized digital currency, but paypal Investors and pressure from the major financial institutions pushed them away from that idea.
So elon had the basic idea for what cryptocurrency would become long before bitcoin there’s, even an argument to be made that elon never actually stopped working on creating a cryptocurrency and might have actually been the anonymous figure who created bitcoin referred to as satoshi nakamoto. There are definitely some parallels to be drawn, but that’s a whole other rabbit hole that i suggest you strap on the tinfoil hat and dive into and then there’s elon’s long standing affinity for dogecoin that’s. Basically, a meme cryptocurrency that started off as a joke, but gradually became for real as elon started getting into it. Elon would periodically mention dogecoin in his tweets, even at one point changing his twitter bio to read, former ceo of dogecoin and every time doge got a shout out from musk. The value would spike up we’re, not talking about large amounts of money. Here one dogecoin has been valued at less than a cent for most of the currency’s history, and that is until elon came back around last month and at the exact same time that he was talking with michael saylor about bitcoin investing elon tweeted. One word doge that started dogecoin off on a climb to break the one cent mark by january. 2Nd 2021 dogecoin has also made great progress on the back of reddit gamestop stonks battle, achieving a growth rate of 420 in one day, one of elon’s favorite numbers. Of course, and musk gave a nod to this achievement by tweeting, a fake dog magazine cover with no comment.
Naturally, this was 10 hours before elon dropped his bitcoin tees and sent the markets into overdrive. Now, if you haven’t noticed yet this is all insane and trying to make a cohesive video out of this madness is pretty damn difficult as well. So please smash the like button for making it this far. I appreciate you, so all this is to say, could elon be secretly stockpiling, bitcoin well back in may 2020. He casually mentioned on twitter that he only owned 0.25 bitcoin, which was probably true. He would have no real reason to lie about it at that point, but in a time where bitcoin price is taking off like a rocket and speculation, around elon and bitcoin is at an all time high. It would make sense that if he was buying it, he would be doing so in secret until january 29th, at least when he decided to let the world know that he had bitcoin on his mind. The first conclusion that everyone jumped to was that this means elon is buying or has already bought some amount of bitcoin, which again i’m sure is true, but no one knows how much if just the implication of it can cause a 20 shift in the coins value. Imagine what would happen if the richest man in the world told us that he already owned hundreds of millions of dollars worth people would freak out. The more practical question would be around tesla and whether or not elon has taken michael saylor’s advice and started the process of converting the company’s cash assets into bitcoin it’s.
A risky proposition for sure tesla is a big deal now, one of the biggest companies in the world and they’ve accomplished a record year and turned their first annual profit. It would be an incredibly bold move to start risking the company’s stability by converting assets into cryptocurrency. At a time when we have no idea about the long term implications of doing this big time, investors seem to be very divided on the subject, and this could be the smartest move ever or financial suicide. Depending on who you ask now, we can say for sure that all this bitcoin hype around elon has done nothing good for tesla stock value as the day rolls on here on january 29th, tesla’s share price continues a slow decline that started at the beginning of this Week and reached its lowest point this afternoon. Obviously the only person who really knows what the hell is going on as of right now is elon musk himself and he seems to be having a great time just messing around and driving speculation in whatever direction he likes. So i guess we’ll just have to see by the way, if you’re already invested in the crypto markets or are looking to get into it and would like to support us here on the channel check out our block file link in the description down below. I personally use blockfy to earn interest on my crypto investments. Blockfi allows you to earn interest with bitcoin ethereum, litecoin or stablecoins, and there are no hidden fees in a blockfy interest account just a return of up to 8.
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