The media has been awash of news about Tesla’s $1.5 million Bitcoin investment especially after the institutional investors stake led to a serial rise in the price of Bitcoin. Bitcoin also hit another all-time-high price after the investment.
Despite the media hype, one of Tesla’s biggest investors, Ronald Stephen Baron said he doesn’t understand the rationale behind the company’s decision to acquire the asset, but he’s not surprised.
Although Ronald, an American mutual fund manager and one of Tesla’s major shareholders, who questions the Bitcoin investment, said he was not surprised the firm did.
In a CNBC interview, Baron said that the recent comments made by Tesla’s CEO, Elon Musk, regarding Bitcoin gave him hints on the purchase, and so, the announcement, which was made on Monday, did not come as a surprise to him.
Recently, Elon Musk has frequently talked about Bitcoin and the meme coin, DOGE, in several of his tweets, pumping the prices of these crypto assets.
However, Baron was not convinced that the acquisition was merely a spur of the moment decision. He said that he would learn about the motive for the purchase before he makes any judgment.
Over 1,000 institutional investor to stake in crypto
After MicroStrategy, Tesla is the second-highest crypto hodler globally. Tesla announced that it invested $1.5 billion in Bitcoin, which makes it the second-largest publicly-traded corporate holder of the digital currency, according to data from bitcointreasuries.org.
MicroStrategy Inc., with its $3.1 billion hoard of Bitcoin after installment investment leads the pack of institutional crypto investors as more are expected in the space.
Michael Saylor, CEO of MicroStrategy, hinted that over 1,400 institutional investors are preparing to take on Bitcoin investments. He held a webinar earlier this month in which he said over 1,400 firms signed up for the session on legal considerations of holding the digital currency.
Other top institutional crypto hodlers are Michael Novogratz’s Galaxy Digital Holdings, Marathon Patent Group Inc., and Jack Dorsey’s Square Inc. round out the top five corporate holders.
Direct effects of Tesla’s Bitcoin investment
Apart from pushing Bitcoin’s price to a new all-time high, the electric car maker’s investment in crypto has led to several other developments in the crypto space.
The automobile maker has said they would begin accepting crypto payments. Similarly, after the crypto price surge, the Winklevoss twin’s wealth has surged to $3.3 billion.
Although the twins have never spoken about the amount of money, they invested in Bitcoin, a publication by the New York Times in 2013 suggested that the Gemini exchange founders had $11 million worth of the currency. The price of Bitcoin then was $141 per coin. It’s now up over 30,472 percent.
Lastly, crypto experts are beginning to tip Apple to become the next prominent institutional investor in the crypto space. An RBC analyst said Apple shares could jump higher if the tech giant steps into the crypto market.
Source: Why Tesla’s Bitcoin investment is not surprising