Bitcoin hit yet another record high on Friday, showing a record high jump this week of almost 8% and hovering somewhere around 60%, another record, which corresponds to a massive $52,932. This was fueled primarily by it gaining acceptance among mainstream investors and market giants such Mastercard, BNY Mellon, and more relevant to the content of this article, the American automobile company, Tesla.
According to cryptocurrency data website CoinMarketCap, with all digital coins combined Bitcoin came around to be worth around $1.6 trillion. This laid to rest all of the analyst warnings labeling it as an economic sideshow in the market and calling out the financial boom in the pandemic to the rise of digital platforms and other such improved financial innovations (sourced from JP Morgan). Such analyst warnings are not completely unfounded owing to the massively unpredictable nature of this cryptocurrency, a fact most investors agree upon.
Coming to Tesla’s role, it all started with the company announcing an investment of $1.5 billion in bitcoin, making it one of the biggest investments by a mainstream corporation into the most popular cryptocurrency. This was followed by a series of announcements including the decision to start accepting BTC(bitcoin) as a form of payment, and they justified this by explaining its updated investment policy to be more flexible in further diversifying and maximizing returns on its idle cash. This was followed by a series of Tweets by Tesla CEO, Elon Musk, who said owning the digital coin was only a little better than holding cash. He also defended Teslas’ recent purchase of $1.5 billion of bitcoin which has ignited a huge mainstream interest in the cryptocurrency. The prices skyrocketed and as of Friday are trading at $52,160 a coin. In a sense, Tesla played a vital role in encouraging people to invest in more digital currencies taking into account the aftermath of the pandemic which has lead to the growing risk of inflation.
Another cryptocurrency, Dogecoin, which is popularly called the joke currency also saw a surge after Musk posted a Lion King meme of him holding up the dogecoin dog like Simba. He said at the time: ”They are really just meant to be jokes, but you know Dogecoin was made as a joke to make fun of cryptocurrencies obviously, but fate loves irony and often as a friend of mine says that the most ironic outcome or I’d say the most entertaining outcome and the most ironic outcome would be that Dogecoin becomes the currency of earth in the future.” Dogecoin hit an all-time high last Sunday and although it fell back this was a record for a currency that apparently started as a joke. This was compounded by celebrity rapper Snoop Dogg tweeted a picture of one of his album covers with his face replaced with the dogecoin Shiba Inu dog, the official mascot of Dogecoin. By the end of Monday, the cryptocurrency was worth $9 Bn, the 10th highest valued cryptocurrency in the market and a record.
It is evident that the tech mogul who made everything from statements to memes about cryptocurrency reignited all the mainstream market interest in cryptocurrency and its nuances and literally “moved the market”.