Tesla and Bitcoin’s Immediate Value Surge
After the company announced accepting Bitcoin as a method of payment, both the cryptocurrency and the business’s stock saw sharp increases in value per coin and share. In fact, Tesla stock ended the day up 1.31%, boosting the company’s value to $863.42 per share, an increase of over $11 per share.
In a similar vein, Bitcoin saw the value of each coin surge dramatically as well, with the cryptocurrency peaking at over $48,000 per coin at around 2 a.m. on February 9 before eventually settling at well over $45,000 a coin, where it currently stands. These boosts in value to both Tesla and Bitcoin make perfect sense considering the implications that the company’s announcement has on business.
The greatest boost from Bitcoin comes as the cryptocurrency — which has already seen significant increases in value over the past year — becomes more legitimized in the eyes of many investors who were apprehensive due to the lack of real world applications. Despite the erratic value of Bitcoin, Tesla’s acceptance of the cryptocurrency makes it as viable as any government-backed legal tender.
Looking Ahead to What Is Next
For Tesla, there is unlikely to be any federal interference when it comes to implementing the cryptocurrency as a payment method, clearing any possible worries about regulations or pushback. What is far more interesting is how other businesses and companies respond to this announcement. In fact, many analysts are expecting businesses of all types to start looking at Bitcoin and other digital currencies as viable for purchasing goods and services.
When speaking to CNBC about the implications of Tesla’s actions, Galaxy Digital Founder Mike Novogratz said, “Every company should be looking at how to accept digital currencies, digital payments as part of their business scheme. It’s not that difficult. It’s what customers want, it’s where the world is moving. And so that I think he’s getting ahead of the curve, and I think you’re going to see every company look to figure out how they could, from McDonald’s to Bojangles, you name it.”
While businesses will certainly be taking notice of the EV company’s actions, others have been urging caution as many do not know the effect Bitcoin’s volatile price would have on a business if the cryptocurrency were to see a drop in value.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.