According to data by TradingView, at 06:59 UTC on Tuesday (February 9) — the day after Tesla announced it had invested $1.5 billion in Bitcoin — the Bitcoin price hit $48,200, which is a new all-time high (ATH).
As you can see in the 24-hour price chart above, there was a huge spike in the Bitcoin price around 12:40 UTC on Monday (February 8). That’s roughly when the crypto community discovered that Tesla had earlier in the day informed the U.S. Securities and Exchange Commission (SEC) via its 2020 annual report (on Form 10-K) that it had already invested $1.5 billion in Bitcoin.
The same Fear of Missing Out (FOMO) that led Elon Musk to invest approximately 7.7% of Tesla’s cash (Tesla had $19.384 billion in cash at the end of Q4 2020) — as well as the additional legitimization and de-risking of Bitcoin that this important endorsement from the world’s richest man has brought — helped the Bitcoin price to get above $48,000 and seemingly on its way toward $50,000 in the near future.
MicroStrategy CEO Michael Syalor talked about this de-risking of Bitcoin in a tweet he posted yesterday following his interview on CNBC’s “Power Lunch”.
Crypto analyst and trader Scott Melker thinks that some of the FOMO we are seeing could be due to investors in Asia waking up to hear about Tesla’s investment in Bitcoin.
Meanwhile, crypto analyst and influencer Lark Davis points out that yesterday Bitcoin registered its highest ever dollar daily candle.
And on-chain analyst Willy Woo made the interesting observation that since MicroStrategy revealed last August that it had invested in Bitcoin for use as its primary treasury reserve asset, Bitcoin had shown a high inverse correlation to gold.
Bill Barhydt, CEO of Abra, believes that although people talk about the fact that 6% of Bitcoin’s maximum supply is estimated to be incorporate treasuries, “the real number including unreported private companies, VCs, etc, is probably at least 2x that and growing.”
Two examples of the private companies that the Abra CEO is talking about are his company and Raoul Pal’s Real Vision.
As for how high Bitcoin’s price could go, it’s impossible to say because like any other asset, its price is determined by supply and demand. Tyler Winklevoss, Co-Founder and CEO of crypto exchange Gemini, said yesterday that the Bitcoin price is “heading to Mars”, and it is not easy to argue with this assessment.
Now that Elon Musk, who is not only the world’s richest person, but considered by many to be one of the world’s smartest people, has made this significant commitment to Bitcoin, the rapidly increasing level of excitement around Bitcoin is going to make it a lot harder for the voices of Bitcoin critics such as Nouriel Roubini and Peter Schiff to be heard. And with so many corporations, sovereign funds, central banks, family offices, high net worth individuals, and ordinary retail investors yet to invest in Bitcoin, the long-term future of Bitcoin looks decidedly healthy.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.