While 2020 was an important year for Bitcoin (BTC), the year 2021 that has just begun is already full of big surprises. On February 8, the price of Bitcoin rose nearly $ 3,000 in minutes, then rose 20% in 24 hours – all due to news that Elon Musk’s Tesla BTC had allocated $ 1.5 billion to its balance sheet.
That same week, the oldest bank in the United States, the Bank of New York Mellon, announced plans to hold, transfer, and issue Bitcoin. Mastercard also plans to support cryptocurrencies for its nearly 1 billion users in 2021. And SEC Commissioner Hester Peirce, commonly referred to as “Crypto Mom” in the crypto community, even underlined the urgent need for regulatory clarity due to recent events in space.
When PayPal, Tesla, Mastercard, BNY Mellon and others step into the cryptosphere, won’t it be clearer than ever that digital assets are now part of the mainstream? That their mass adoption has started and that it’s about the present, not the future?
Last year, Cointelegraph asked experts from the crypto and blockchain industry for their opinion on the crypto integration and mass adoption of PayPal and the importance of 2020 in the history of Bitcoin. This time around, the question arises: What does Tesla’s recent $ 1.5 billion investment in Bitcoin mean for the crypto space in terms of financial markets, crypto adoption and branding, and the industry in general?
Alex Tapscott, Managing Director at Ninepoint Partners:
“Tesla’s purchase of Bitcoin has undoubtedly sparked a shock wave through the corner offices of all finance directors and treasurers in America and beyond. One of the many benefits of Bitcoin is that it acts like digital gold, diversifying corporate holdings and reducing currency risk. Every financial manager should sharpen his pens to understand if and when to buy them.
Tesla may not be the first public company to buy Bitcoin for its treasury, but it is by far the most important. How poetic it is that Elon Musk, a space entrepreneur, brought Bitcoin to its escape speed in American corporations!
Tesla’s decision follows a series of high-profile announcements from large companies that fit a pattern of accelerating institutional and corporate adoption. Equally important to the allocation of government bonds was Tesla’s decision to accept Bitcoin. This is following in the footsteps of several other great innovative companies like PayPal, Visa, and others who are building a highway for the mass adoption of bitcoin, allowing not only the buying and selling of bitcoin but also integration with their merchant networks. By the end of 2021, I would expect many more companies to not only hold Bitcoin, but also follow a real Bitcoin strategy. “
Da Hongfei, Founder of Neo and Founder and CEO of Onchain:
“This is a promising sign of mainstream interest and increasing willingness to embrace blockchain. It also confirms that blockchain and bitcoin will be preserved for the future.
As the year 2020 went on, more and more financial institutions were investing in Bitcoin, and I am confident that blockchain adoption will accelerate as the global financial paradigm changes to fully support digitization and decentralization. Going forward, we must continue to push for effective standards across the industry, as well as greater integration, to fully exploit the groundbreaking potential of blockchain. “
John Wu, President of Ava Labs:
“Tesla’s $ 1.5 billion purchase of Bitcoin not only continues the momentum of public corporations buying crypto, it could also be a turning point that establishes some digital asset allocation as the cornerstone of a healthy, diversified treasury .
Regardless of the industry, companies should follow these early adopters and create paths to the payment rails and financial infrastructure of the future. That starts with Bitcoin and will steadily expand to projects that are out of bounds and focus on the programmable, intelligent asset side of the ecosystem, where businesses can find more use cases than digital gold. “
Joseph Lubin, founder of ConsenSys and co-founder of Ethereum:
“The acceptance of Bitcoin and Ether by institutional investors and corporate treasury departments in recent months is a turning point for the global economy – the first concrete signs of a paradigm shift in the construction of global business, financial and economic systems. They are re-searched in real time on a new automated, objective basis of trust, as represented in the Ethereum and Bitcoin networks.
Today corporate finance departments are learning how to manage BTC and ETH tokens to preserve value, reduce the friction of transactions, and gain benefits, as these systems will grow dramatically in size and value with the introduction over the next few years. Tomorrow their treasuries will be integrated into the decentralized financial protocols that rely largely on Ethereum for borrowing, lending, trading, stock and bond issuance, life cycle token management, insurance, forecasting markets, trade finance, tokenization and factoring of bills, loyalty tokens and are based on NFT art that can be projected onto the walls of their boardrooms. They will do this because they will be able to configure and issue financial instruments without an intermediary, and they will be able to tailor financial flows to their needs in real time. And they will do this because that’s where the liquidity is. “
Michael Terpin, founder and CEO of the Transform Group:
“Tesla’s bold move to invest $ 1.5 billion of its treasury in Bitcoin and to accept Bitcoin as a means of payment for Tesla vehicles in some countries opens the door wide for American businesses and wealthy families to seriously consider starting a small business using some of their net worth in Bitcoin as a store of value in lieu of bonds, gold, dividend stocks and commercial real estate that were below historical standards.
With only 18.6 million Bitcoin in the world – and maybe 4 to 5 million Bitcoin lost or not for sale – it is not enough to meet the demand of 46.5 million global millionaires, or 1% to 5% of Bitcoin In the United States alone, $ 4 trillion in cash appears on corporate balance sheets. Add 1.8 billion millennials, mostly in countries with broken currencies or banking systems, and you can see that the supply and demand for Bitcoin are out of balance.
Over time, that demand will sink to Ethereum, which already has a large chunk of Fortune 500 development applications installed on it, as well as innovative cryptocurrency platforms in DeFi and NFTs – and numerous billionaires, including Mark Cuban, have recently jumped onto those belt cars. We are in the year after the halving – what I call “Bitcoin Summer” – and after every four year halving event, parabolic growth has occurred so far. This year is likely to be no exception. “
Mike Belshe, CEO of BitGo:
“In the face of the pandemic, domestic inflation, and global uncertainty, mainstream companies have moved into digital assets with a newfound enthusiasm. From public companies like Tesla and Square to funds like Grayscale and the Tudor Group, prominent institutions are increasing their exposure to Bitcoin. Overall, these institutes hold an estimated 6% of the 18.6 million Bitcoin in circulation, which equates to over 1.2 million BTC. After Bitcoin hit an all-time high of over $ 48,000 in early February, the total value of these institutional holdings was over $ 55 billion.
For the past six months, BitGo has tied many corporate accounts through the process of training, smart market access, asset accounting and reporting, and more – while keeping assets in regulated, qualified custody with the highest level of security for freezer storage.
Mainstream acceptance of Bitcoin will only grow exponentially as more and more institutional investors accept cryptocurrencies, thus paving the way for future market participants to follow them. This escalating market demand from large companies is likely to continue to affect the value of Bitcoin and possibly even help reduce Bitcoin’s volatility. With the final mining of Bitcoin in 2140 and a monthly trading volume of over 2 trillion US dollars, there is still enough time to get into Bitcoin – for companies and individuals alike. Despite the tremendous acceleration of institutional investors, we are probably only at the tip of the iceberg on mass adoption. More companies and funds will soon see the success these first movers have enjoyed and will therefore begin to follow suit. “
Scott Freeman, Co-Founder and Partner of JST Capital:
“Tesla’s recent investment in Bitcoin, announced by Elon Musk, is another example of the increasing adoption of Bitcoin and digital assets as a separate asset class. We quickly get to the point where announcements like this are no longer considered “news” and no longer generate any reaction in the marketplace.
Take, for example, the recent announcement by BNY Mellon, which we think is more important but doesn’t cause a stir in the market. If we take a step back, we think the success of Bitcoin, and of digital assets in the broader sense, is a powerful harbinger of the power of global retail innovation in financial markets. Take a look at recent activity in GameStop for another example. We believe this trend will continue and raise important political and regulatory issues that need to be addressed by governments and central banks around the world. “
Tim Draper, Founder of Draper Associates and Draper Fisher Jurvetson:
“When I tweeted about accepting Bitcoin on Elon three weeks ago, I had no idea that he would be so responsive by first accepting Bitcoin and then managing his money by buying Bitcoin. I expect the actions he’s taken will be ubiquitous, first for the early adopter companies using OpenNode or the Lightning Network to accept Bitcoin, and then for the world’s finance chiefs to get the Realize need to own bitcoin to hedge against coming inflation and further printing of fiat currencies by politicians. “
These quotes have been edited and compressed.
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