May 25, 2024

Bitcoin surges to end at $44,000 with a $1.5Bn stimulus invested by Tesla and the acceptance of cryptocurrency as payment initiative


There is a very positive news coming from the world of Bitcoin the most happening cryptocurrency, having experienced most fruitful as well as the most turbulent times in the recent past. However, the best part is that it has always maintained a promising position amongst other digital cryptocurrencies even when it has a huge slump down from a peak position.

Today, post an announcement done by Tesla, the global Electric Vehicle giant, stating its confidence on the controversial digital cryptocurrency to give it a huge thrust by investing a staggering $1.5 billion, the cryptocurrency Bitcoin upsurged as much as 15 percent, its highest ever as the rates soared sky high to hit $44,000 for the initial ever time.

The California-based firm uncovered their investment policy the preceding month for diversification of its assets as well as in maximization of their overall returns on cash holdings, as stated in their statement to the US Securities as well as Exchange commission today.

Tesla, also was prompt to announce that it would commence acceptance of the digitalized tokens as form of payment for their electric vehicles.

As part of their latest policy, Tesla purposes to invest a portion of its cash in alternate assets including digital assets, gold bullion and gold exchange-traded funds.

The spokesperson of Tesla was prompt to state that “They’ve invested $1.5Billion in Bitcoin under this particular policy and we expect to begin accepting Bitcoin as a form of payment for all our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

Tesla being known as, one amongst the global most influential enterprise and run equally by a robust, influential billionaire Elon Musk, have seriously thrown out a large chunk of mass behind the crypto controversy giant touted as Bitcoin, provides it a huge sign of support on the back of the same, as it has off late dealt severe criticisms faced by policymakers for facilitating currency laundering and fraud.

Rates for the digital asset gushed 15.35 percent to close at $43,750 at 7.29pm UAE time post the news. Industry analysts are optimistic and expect Bitcoin to dash the $65,000 mark.

Tesla’s investment in Bitcoin shows “it is a currency and it can be accepted for payment”, argued Naeem Aslam, chief market analyst at brokerage Avatrade, adding, “There is nothing which is going to stop Bitcoin from mounting now. The next stop is 50K and then we are moving towards the 65K.”

Antoni Trenchev, managing partner and co-founder of Nexo in London stated that ““The world’s richest man allocating $1.5 billion of his company’s treasury to Bitcoin speaks volumes about the magnitude at which crypto gains institutional adoption, and the point that how Tesla has currently paved a perfect pathway.”

“Bitcoin is heading towards the sky, another billionaire has come out and he has put his money where his mouth is … traders have been waiting for Elon Musk to make some big news and today the proof is out,” he added.

In December, Nouriel Roubini, professor of economics at New York University’s Stern School of Business and one of crypto’s fiercest critics, said Bitcoin “doesn’t have any fundamental value. Calling them cryptocurrencies is a misnomer … to be a currency it has to be a unit of account, a scalable means of payment and a stable store of value,” he stated.

In all of these counts neither Bitcoin or any other cryptocurrency is a currency,” Mr Roubini said. “Second, there is plenty of academic evidence suggesting that the price of Bitcoin has been manipulated … and it doesn’t have any intrinsic value.”

In the SEC filing, Tesla also accepted the concerns connected with the trading of cryptocurrencies.

Without centralized issuers, digital assets are issue to security breaches, cyber-attacks, as well as human errors or computer breakdowns that may affect in the loss of secluded keys desired to access such assets, the giant stated.

“While we intend to take all reasonable measures to secure any digital assets … if such threats are realised or the measures or controls, we create to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be harmed,” the giant enterprise announced. Tesla’s stock was up 0.26 per cent at $852.23 per share on Monday.

Tesla, which momentarily suspended operations at each of its manufacturing facilities in the first half of 2020, stated that its business could be impacted by “macroeconomic conditions” resultant from the Covid-19 pandemic.

“We cannot predict the duration or direction of current global trends … the sustained impact of which is largely unknown.”

Tesla, which joined the S&P 500 index in December, distributed close to 5,00,000 vehicles globally the preceding year. It aims to upsurge its production to more than 750,000 units this year.

The preceding month, Tesla reported a 157 percent annual surge in fourth quarter net profit to $270 million based upon the augmented demand for its electric vehicles.

Few other firms that have made similar investments in Bitcoin. MicroStrategy has disbursed some $1.1 billion on the token. In October, Square, headed by long time crypto advocate Jack Dorsey, declared that it converted about $50 million of its total assets as of the second quarter of 2020 into the token. Proselytizers like Bill Miller of Miller Value Partners have stated that this was just the commencement of what was sure to be a trend across Main Street.

“We cannot predict the period or direction of up-to-date global trends … the sustained impression of which is largely unknown.”

“If current global market circumstances continue or worsen, or if we cannot uphold operations at a possibility that is adequate with such conditions … our business, projections, financial condition and operating results may be harmed,” it added.

The giant enterprise also added that it may also experience forthcoming delays in launching or storming production of new vehicles and other merchandize.

Bitcoin’s voyage to a record has been manifest with big swings that endure to stoke vagueness about its outlook. Some view speculators at work and an unavoidable bubble bursting. Others cite high-profile backers and interest from long-term investors as evidence of a more durable rally.

Estimates for Bitcoin’s possible long-term worth suggests and ranges from $400,000 and more to zero. The token is planned to have a fixed supply of 21 million coins, reinforced by a digital ledger distributed across computer networks.



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