The show Musk go on? Experts answer

If 2020 was a big year for bitcoin (BTC), 2021, which has just begun, is already full of big surprises. The eighth. In February, the price of bitcoin jumped nearly $3,000 in one minute and then 20% in 24 hours, all thanks to the announcement that Elon Musk’s Tesla had invested $1.5 billion of its balance sheet in bitcoin.

In the same week, the oldest bank in the United States, the Bank of New York Mellon, announced its intention to store, transfer and issue bitcoins. Mastercard also plans to support cryptocurrencies for its nearly 1 billion users by 2021. And Securities and Exchange Commission Commissioner Hester Pierce, commonly referred to in the crypto community as cryptomama, has even pointed to the urgent need for regulatory clarity after recent developments in the space.

With PayPal, Tesla, Mastercard, BNY Mellon and others joining the cryptosphere, surely it’s clearer than ever that digital assets are now part of the mainstream? That their mass adoption has begun and that it is the present and not the future?

Last year, Cointelegraph asked crypto and blockchain experts for their thoughts on crypto integration and the mass adoption of PayPal, as well as the importance of 2020 in the bitcoin story. This time, the question is: What does Tesla’s recent $1.5 billion investment in bitcoin mean for the crypto space in terms of financial markets, crypto adoption and brand building, and for the industry as a whole?

Alex Tapscott, managing director of Ninepoint Partners:

Tesla’s acquisition of Bitcoin has certainly sent shockwaves through the offices of every CFO and corporate treasurer in America and beyond. One of the many benefits of bitcoin is that it acts like digital gold, diversifying company assets and reducing currency risk. Every CFO needs to sharpen his pencil to know if and when to finally buy it.

Tesla may not be the first publicly traded company to buy bitcoins for its vaults, but it is by far the largest. How poetic that Elon Musk, the space entrepreneur, is pushing bitcoin into corporate America at lightning speed!

Tesla’s decision follows a series of high-profile announcements from major companies, and is part of a trend of increasing institutional and corporate adoption. An equally important result of the Treasury’s allocation was Tesla’s decision to acquire bitcoin. This follows in the footsteps of other big innovative companies like PayPal, Visa and others who are building a highway for mass acceptance of bitcoin by not only letting people buy and sell bitcoins, but also integrating them into their business networks. By the end of 2021, I expect many more companies to not only own bitcoins, but also have a real bitcoin strategy.

Da Hongfei, founder of Neo and founder and CEO of Onchain

This is a promising sign of the primary interest and growing willingness to engage with blockchain. He also says blockchain and bitcoin are here for the future.

As 2020 progresses, more and more financial institutions are investing in bitcoin, and I believe blockchain adoption will accelerate as the global financial paradigm shifts toward full digitization and decentralization. Going forward, we must continue to push for effective industry-wide standards and greater integration to realize the full potential of the revolutionary blockchain.

John Woo, President of Ava Laboratories

Tesla’s $1.5 billion purchase of Bitcoin not only continues the momentum of public companies acquiring cryptocurrencies, but could be a turning point that establishes single digital asset allocation as the cornerstone of sound and diversified wealth management.

Regardless of their industry, companies should follow these pioneers who are paving the way for the payment rails and financial infrastructure of the future. This starts with bitcoin and will gradually expand to projects that think outside the box and focus on the programmable and smart side of the ecosystem, where companies can find more use cases than digital gold.

Joseph Lubin, founder of ConsenSys and co-founder of Ethereum

The adoption of Bitcoin and Ether by institutional investors and treasuries in recent months represents a turning point for the global economy – the first concrete signs of a paradigm shift in the way the world’s trading, financial and economic systems are structured. They are being converted into the new automated, real-time, objective trust fund that the Ethereum and Bitcoin networks represent.

Today, corporate finance departments are looking at how to manage BTC and ETH tokens to preserve their value, reduce transaction friction and increase efficiency as these systems grow significantly in size and value with adoption over the next few years. Tomorrow, their treasuries will be connected to decentralized financial protocols built primarily on Ethereum for borrowing, lending, trading, issuing stocks and bonds, token lifecycle management, insurance, predictive markets, trade finance, invoice tokenization and factoring, loyalty tokens, and NFT art that can be projected onto the walls of their boardrooms. They will do so because they will be able to configure and issue financial instruments without intermediaries, and they will be able to redirect financial flows in real time according to their needs. And they will, because that’s where the money is.

Michael Turpin, Founder and CEO of Transform Group

Tesla’s bold decision to invest $1.5 billion of its assets in bitcoin and accept bitcoin as payment for Tesla vehicles in certain jurisdictions opens wide doors for high-income American businesses and families to seriously consider investing a small portion of their assets in bitcoin as a store of value rather than in bonds, gold, dividend stocks and commercial real estate, which do not meet historical standards.

With only 18.6 million bitcoins worldwide – and perhaps 4-5 million lost or unavailable for sale – that’s not enough to meet the demand of 46.5 million millionaires worldwide and 1-5% of the estimated $4 trillion in cash on corporate balance sheets in the US alone. Add to that 1.8 billion millennials, most of whom live in countries with a broken currency or banking system, and you see that supply and demand for bitcoins are out of balance.

Over time, this demand will trickle down to Ethereum, which already powers most Fortune 500 apps, and to innovative cryptocurrency platforms from DeFi and NFT – and many billionaires, including Mark Cuban, have recently jumped on these platforms. We’re in the year after the split – I call it the summer of bitcoin – and after the split there was parabolic growth every four years. This year will likely be no exception.

Mike Belshe, CEO BitGo:

In the face of a pandemic, domestic inflation and global uncertainty, traditional companies have jumped on digital assets with new enthusiasm. From publicly traded companies like Tesla and Square to funds like Grayscale and Tudor Group, leading institutions are increasing their stakes in bitcoin. In total, these institutions are estimated to hold more than 6% of the 18.6 million bitcoins in circulation, or more than 1.2 million. BTC. After bitcoin surpassed the all-time high of $48,000 in early February, the total value of these institutional holdings rose to more than $55 billion.

In the past six months, BitGo has added numerous corporate clients in the areas of training, smart market access, asset accounting and reporting, and more – all while storing assets in regulated and qualified storage facilities with the highest level of security for frozen storage.

Bitcoin adoption will only grow exponentially as more and more institutional investors switch to cryptocurrencies, paving the way for future entrants. This growing market demand from large companies will likely continue to influence the value of bitcoin and perhaps even reduce its volatility. With the expected final mining of bitcoin in 2140 and monthly trading volumes of over $2 trillion, there is still time for businesses and individuals to get into bitcoin. Despite the huge acceleration that institutional investors have experienced, we are probably only at the tip of the iceberg in terms of mass adoption. Other companies and funds will soon see the success of these pioneers and begin to follow their lead.

Scott Freeman, co-founder and partner, JST Capital:

Elon Musk’s recent announcement that Tesla is investing in bitcoin is another example of the wider acceptance of bitcoin and digital assets as an asset class in its own right. We are fast approaching the point where such announcements are no longer considered news and no longer provoke a market reaction.

Take, for example, the recent statement from BNY Mellon, which we think is more important but did not cause a stir in the market. Taking a step back, we believe the success of bitcoin and digital assets more generally is a strong harbinger of the power of global retail innovation in the financial markets. Another example is the recent activity of GameStop. We expect this trend to continue and to raise important policy and regulatory issues that governments and central banks around the world will need to address.

Tim Draper, founder of Draper Associates and Draper Fisher Jurvetson

When I tweeted three weeks ago that Elon was accepting bitcoins, I had no idea he would be so accommodating and first accept bitcoins and then manage his money by buying bitcoins. I expect his actions to be ubiquitous, first to get pioneering companies using OpenNode or Lightning Network to adopt bitcoin, and then to get the world’s financial leaders to realize the need to own a few bitcoins as a hedge against the threat of inflation and the continued printing of fiat currency by politicians.

These quotes have been edited and shortened.

The views, thoughts and opinions expressed in this document are those of the authors and do not necessarily reflect the views and opinions of Cointelegraph.

This article does not contain investment advice. There are risks associated with all investments and business transactions, and readers should do their own research before making a decision.

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