Other experts say it’s just a matter of time
before Bitcoin finds more widespread use
in transactions.
“I think the trend is inexorable,” said Richard
Lyons, a finance professor at the University of
California at Berkeley, predicting Bitcoin and
other digital currencies “will become transactional
currencies increasingly over the next five years.
It’s not going to happen overnight.”
Whether Tesla will get a definitive competitive
advantage in accepting Bitcoin remains to be
seen. The automaker could be simply investing
in Bitcoin because Musk has been known to
have eclectic tastes. Musk launched a Tesla
car into space to demonstrate the payload
capabilities of his SpaceX company rockets.
Similar to Tesla, Virginia-based MicroStrategy Inc.
announced in August that it would use some of
the excess cash on its balance sheet to invest in
alternative assets such as Bitcoin. The move has
paid off so far. As of Feb. 2, the business analytics
company said it held 71,079 Bitcoins that it
purchased for an aggregate price of $1.15 billion
since last summer. Using a value of $44,500,
those bitcoins are worth $3.16 billion.
MicroStrategy shares have risen 660% since
the August announcement, but the shares are
susceptible to swings in the price of Bitcoin.
Palo Alto-based Tesla reported its first annual net
profit in 2020, and its stock soared to make it the
world’s most valuable automaker. Tesla joined the
S&P 500 late last year and at a value of $824 billion
makes up about 2% of the benchmark index.
So, funds that track the S&P 500 now have some
exposure to Bitcoin, however small that may be.