Tesla’s Vote of Confidence Causes Crypto Craze As Ether Futures Hit $33 Million On First Day

Bitcoin Price Hits Record After Tesla Buys

It was a great week for cryptocurrencies in general and Bitcoin in particular as a tsunami of institutional investment and a ton of media attention had prices surging. Crypto prices responded positively to a supportive news cycle that does not show signs of letting up. 

Tesla Vote of Confidence Sends Bitcoin Sky-rocketing

The week began with a noteworthy surge in cryptocurrency prices as the electric vehicle company Tesla announced an impressive purchase of $1.5 billion worth of Bitcoin. In their filing with the SEC, the clean energy and car company referenced this purchase by saying it is intended to provide, “more flexibility to further diversify and maximize returns on our cash”. After news of Tesla’s investment move broke, Bitcoin surged past $48,000 to a record high on Tuesday, jumping 17%. 

But it is not just about passive investments and forward thinking for this billion dollar company. Tesla’s stock market filing also revealed that they would likely begin accepting payments in Bitcoin in exchange for their products, an announcement that sparked excitement through the crypto world. “Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” said the statement. For example, as the Tesla Model 3 is currently priced at $35,000 you could theoretically buy one for less than 1 BTC (which at press time is worth around $44,000). This level of embrace of Bitcoin brings to light the wealth of potential for Bitcoin owners, should widespread adoption be underway.  

This move is not a standalone event as on previous occasions Tesla’s CEO Elon Musk has routinely thrown his hat behind Bitcoin, frequently tweeting about the cryptocurrency. Most recently, during a chat on the social media app Clubhouse, Musk said that Bitcoin was “on the verge” of becoming more widely accepted among investors, comments that coincided with a 14% rally in cryptocurrencies. Musk went on to add, “I do at this point think bitcoin is a good thing. I’m late to the party, but I am a supporter of bitcoin”. The billionaire had also changed his Twitter bio days prior to that statement, adding #Bitcoin, then removing it from his bio. 

This revelation is seen as a real game changer for cryptocurrency as it signaled wide spread institutional investment. 

Visa and Mastercard Signal Further Interest in Crypto

More institutional embrace towards crypto came in the form of networking payment processing giants Visa and Mastercard launching their own plans for crypto adoption. Mastercard Inc. announced that it would begin allowing cardholders to transact in certain cryptocurrencies, signaling an official embrace of crypto by the company. The option for these payments is set to take place later this year, but the financial giant has yet to disclose which cryptocurrencies are to be included. In the past, Mastercard had partnered with crypto firms such as Wirex and BitPay but had previously required cryptocurrencies to be converted into fiat currencies before being processed as payments. This move would set new precedent wherein crypto would be used as is on the network, without any conversions being needed. 

Similarly, credit card provider Visa has also announced plans to implement a new program of applications programming interfaces (APIs) that will enable banks to include Bitcoin based services in offerings to their customers. This will allow customers to purchase, hold, and trade digital assets, opening up the world of crypto to Visa’s millions of customers. Visa’s press release detailed the process saying, “We set out to make Visa the bridge between digital currencies and our global network of 70 million merchants”. 

Once major opposers of Bitcoin and cryptocurrencies, these payment processing giants have joined the likes of PayPal and signaled interest in the world of digital currencies. 

Amazon Hires Developers for Digital Currency Project

Also big on the possible institutional adoption front is multi-national tech company Amazon working on a new digital currency project. According to a job listing on the Amazon website, Amazon’s Digital and Emerging Payments (DEP) division is currently seeking project managers and software developers in preparation of launching a digital currency project. Being led by one of the largest companies in the world, this level of crypto adoption would be groundbreaking for the sector.

Though the specifics of the project have not been announced as of yet, a series of job posts give insight as to what the product could entail. The job posting describes the product by saying that it “will enable customers to convert their cash in to digital currency using which customers can enjoy online services including shopping for goods and/or services like Prime Video”. The posts also describe the upcoming project as a “new payment product,” both of which signaling the birth of a new digital asset. The project is set to launch out of Mexico, then will presumably be deployed to other markets. 

Despite the fact that it has not launched yet, the mere mention of these hirings is set to add further legitimacy for crypto amongst skeptics, signaling further institutional adoption. 

Ether Futures Rake in $33M on First Day

The world’s largest marketplace for derivatives contracts, CME Group, launched Ether futures contracts on February 8th. The contracts managed to drive over $33 million in volume on the first day alone. A total of 288 ether contracts traded by volume on Monday, with each contract having 50 ETH each. This was a big milestone for Ethereum as it provides Ether the legitimacy that it has vied for, and gives institutions an accessible way to invest in the cryptocurrency at a slightly reduced risk. 

This coincided with the digital asset hitting a new all time high of $1,824. Ether has more than doubled in value, and has a market cap of over $200 billion. CME Group also currently holds 10,500 Bitcoin contracts, each of which hold five Bitcoin. That corresponds into a market impact of 52,500 Bitcoin, or a current value of $1,559,250. 

The year 2021 has been impactful for the world of cryptocurrencies, beginning with huge price rallies and leading to wide scale institutional adoption in the form of Tesla, Mastercard, and Visa to name a few. All that remains is to see how policy makers respond to these changes. 

Cryptos Hit New All-Time Highs
Close Bitnami banner