Elon Musk wants you to buy a Tesla using Bitcoin – and it’s a bigger deal than you think
Institutional investment in Bitcoin grows to $57 billion as Tesla and Microsoft both explore accepting Bitcoin payments
- Elon musk announces on Twitter than you can now pay for a Tesla using Bitcoin – which will be held by the company instead of traded for cash.
- A record-breaking US$6 billion worth of Bitcoin options are set to expire at the end of the month, with analysts believing it will have a major impact on price.
- Institutional funds now manage US$57 billion worth of Bitcoin according to CoinShares data.
Bears are back in control as Bitcoin slides lower to $68,000 before rebounding to trade for $69,117 press time.
Multiple analysts believe that bears are attempting to drive the price lower ahead of a whopping $6 billion of options contracts closing at the end of the month. In a theory described as "max pain" by Luuk Strijers, CCO of crypto options market Deribit, institutions and whales who own put options will attempt to drive the price as low as $44,000. The belief is that as the month comes to a close, options traders with sufficient capital to move markets will attempt to drive the price towards the point that causes the most pain for the counterparty.
The upshot of this theory is that if Bitcoin can reach the end of the week without a significant drop, then the expiry of options should remove a significant amount of downwards price pressure in the market.
Tesla now accepting Bitcoin payments
Elon Musk has announced that Tesla will now accept Bitcoin payments for new cars.
Perhaps the more exciting element to this news is what Tesla plans to do with the Bitcoin they receive. Unlike many retailers which accept Bitcoin payments via third-party services that convert Bitcoin to cash, Tesla plan to hold the Bitcoin as is. Doubling down on its commitment to the blockchain, Musk said that Tesla is also running Bitcoin nodes to help secure the network and process transactions.
Musk elaborating on Tesla's commitment to Bitcoin. Source: Twitter.
This is a major endorsement for Bitcoin as both a store of value and payments gateway and comes at a time when other big names like Microsoft are surveying users if they would like to pay for Xbox services with Bitcoin.
Institutional investment reaches $57 billion
Cryptocurrency investments have reached a new high of $57 billion among institutional-level custodians, according to data released by digital asset manager CoinShares this week. The firm reported an increase in all tracked assets except for XRP which is likely held back by the current SEC case against Ripple.
Greyscale Digital makes up the bulk of institutional assets under management, with $42.9 billion assets under management currently distributed across 14 different crypto-assets. Interestingly Greyscale saw investments into Bitcoin products decline over the past week, while inflows into Ether picked up despite falling prices and network congestion issues.
Greyscale Assets Under Management 24/03/2021. Source: Twitter.
Disclosure: The author owns a range of cryptocurrencies at the time of writing