- Tesla announced a $1.5 bitcoin purchase
- The electric car manufacturers also revealed plans to accept cryptos in the future
- The announcement falls in line with a concept that has been greatly preached in the crypto industry
Tesla Ventures into The Crypto Space
The most buzzed-about news in the last couple of days has been how Tesla, led by Elon Musk, invested $1.5 billion into Bitcoin. Along with the announcement, the electric car manufactures noted that they are planning to begin accepting this cryptocurrency as a form of payment.
Shortly after the news was announced, there was a bullish resurgence that saw Bitcoin and many altcoins aim for new all-time highs. The price of bitcoin moved rapidly higher to peak at $48,003.
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The move has generated a frenzy of analysis, criticisms, discussions, and debate. What exactly does the move mean for the crypto industry?
Mainstream Adoption is Close By
Without looking at the price swing that ensued after the Tesla announcement, it is no longer hard to see that mainstream adoption of cryptos is no longer far off, neither does it seem like an impossible feat.
In the last few months, we have reported moves from the likes of PayPal, Microstrategy, MassMutual, Visa, Square, and Mastercard, and a long list of other organizations moving into crypto. The recurring theme of cryptos needing mainstream adoption is something we’re witnessing already.
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Amid the fury of price movements surrounding the news, it is easy to lose sight of the fact that the industry is enjoying a level of mainstream adoption that it didn’t have in 2017. It is also important to take a bigger picture perspective.
On the Flipside
- As Elon Musk and Tesla sparked a new crypto interest, scammers capitalized on the move to target newbies to make quick profits
- A sophisticated giveaway scam using the alias of Elon Musk was spotted across social media platforms including Twitter and Reddit
- One of the scams reads “If you send in 5 BTC or 50 ETH, you will get the Grand Prize: a brand new Tesla Model S Performance with Midnight Silver Metallic, Solid Black and Red Multi-Coat exterior”
Currency or Investment?
As the crypto industry moves towards adoption, a hotly debated topic has been what is the use of Bitcoin and other altcoins? Are they just another investment? Or will they ever be used as a currency?
The price volatility of the asset class is one of the major reasons why many believe that cryptos will remain just an investment. Shortly after the Tesla announcement, Bitcoin jumped by over 20 percent in merely hours, something not characteristic of currencies.
However, the use of cryptos as a currency looks to be increasing with major financial service providers like PayPal, Visa, Square, and Mastercard opening their doors to not just purchases, but means of storing and using cryptos.
Another important note is the fast-paced efforts put in by countries to develop central bank digital currencies (CBDC.) China leads the way, with the likes of India, Sweden, the Bahamas, Canada, Finland, the United Kingdom, and Uruguay already researching ways of launching theirs.
If cryptos were not really considered a currency, there would be little attention from central banks on the global level to create crypto versions of their currencies.
Without a doubt, cryptocurrencies represent the future of money, however, pioneers like Bitcoin would need to evolve, becoming more stable before they can truly replace currency. When does the price of Bitcoin eventually stabilize? Remains to be answered.
