After taking a brief hiatus, Bitcoin is off to new heights again. The previous record at $ 41,000 has just been shattered. As of this writing, BTC is trading at over $ 48,000 . It was the announcement of a 1.5 billion Tesla investment in cryptocurrency that spawned this violent movement.
The Musk effect on financial assets
The Musk effect on asset prices is a well-known phenomenon. Every time Tesla’s brain tweets about a company or asset, its price soars almost instantly. This is true for Dogecoin . Or when his followers confuse the name of an app with a stock title . Let me explain…
On January 7, Musk tweeted ” Use Signal .” It is an encrypted messaging app developed by a non-profit company. Nothing to do with Signal Advance , a technology company based in Texas. This did not prevent this title, ticker SIGL , from closing the January 7 session at 3.76 dollars. The action had never exceeded 60 cents until then… And the madness propelled the title to more than 40 $ . Even though he corrected up to $ 3.15 today, it’s still 5 times more than before Musk’s Tweet . But back to our tokens …
Against this background, it is easy to understand the consequences of the official confirmation of the investment of part of Tesla’s treasury in Bitcoin. MicroStrategy didn’t just invest in BTC. His boss, Michael Saylor, is very active in convincing his peers to imitate him. His actions more than likely weighed in the balance. But there is still better. Now, rumors are circulating about Apple. The apple company is also reportedly considering investing in Bitcoin .
It’s when euphoria reigns that you have to be careful
I am not particularly enthusiastic about the news from Tesla. To me, this sounds like an opportunistic act that has nothing to do with Bitcoin fundamentals. At the end of December, Elon Musk had tweeted that “ Bitcoin is almost as crappy as paper currencies ” (sic). However, he is aware of his influence, the signal misunderstanding is the more emblematic example. By doing so, he was able to breathe new life into Tesla stock, which defies all stock market valuation measures. It’s great fun sending Doge into the top 10 . But we are entitled to expect better from the boss of one of the largest market capitalisations in the world, who risks creating many “bagholders” of DOGE.
On the other hand, if Apple were to enter the crypto field, it would be immensely positive. There is no doubt that the price of Bitcoin will continue to rise in the coming months. Bitcoin at $ 100,000 or EUR is a realistic target in 2021. But the more BTC will take up, the more it will attract the attention of regulators. This is a risk that should not be overlooked. This is a new asset, we have no benchmarks . It is impossible to know how far this will go. And as it’s often said: don’t invest more than you can afford to lose.