When Tesla joined the S&P 500, some people wondered if it wouldn’t bring too much volatility to the index.
Note: It was the biggest inclusion of a company in the index of all times, with a weight of almost 2%. In 2021, stocks rose 460% and more than doubled since the S&P Dow Jones Indices said in November that the automaker would be added to the index.
Elon Musk disclosed that Tesla has invested $1.5 billion in Bitcoin and plans to start accepting cryptocurrency as a form of payment.
For those worried about Tesla’s high price and the stock turmoil, this is something new to consider.
In addition, the automaker’s movement has raised again a debate about the behavior of Elon Musk on Twitter, which whenever he comments something, moves the market.
The company’s CEO has been credited with raising prices for both Bitcoin and the cryptocurrency Dogecoin, posting positive messages that encouraged more people to buy these assets.
Musk added the hashtag #bitcoin to his Twitter biography, in a move that helped raise the price of cryptocurrency briefly by as much as 20%. Two days later, he said on the social network Clubhouse that “Right now, I think Bitcoin is a good thing and I’m a Bitcoin supporter.”
Tesla is not alone. Other institutional investors have also been buying bitcoins, such as MicroStrategy and the Grayscale fund.
Even in this insight — Bitcoin, both sides of the coin — Dex, responsible for the allocation area at XP Inc, explained that the recent rise in bitcoin came, among other factors, from the change of discourse: in the past, digital currency was totally focused on retail, on us. Today, the focus is completely on institutional investors, and it was this shift that laid the foundation for sustaining the valuation.
So it is. Bitcoin has risen 300% in 2020 and has already accumulated +50% this year, reaching an all-time high of $44,795, due to Tesla’s news.
Dennis is a cryptocurrency blogger who writes about the latest developments in blockchain technology. He has been blogging for over 4 years and his posts have been read by people from all around the world. His blog covers a wide range of topics, such as trading advice, new ICOs to invest in, and how blockchains can be used outside of cryptocurrencies. Dennis also enjoys writing about more technical aspects of cryptocurrencies and blockchain technology.
