Is Musk Making a Bad Investment Buying Bitcoins?
Musk’s Bitcoin investment could be bad for climate reputation and bottom line
We’re not saying that, but investors, analysts and money managers at some of America’s largest banks. The investment of Tesla’s $ 1.5 billion USD in Bitcoin might be good for Elon Musk, they say, but it’s risky for the company. The stock market price of the crypto currency has already flew up towards $ 50,000 today, that is.
Standard bearer
Tesla is, of course, the first truly serious consumer electric car. There is an atmosphere of an honest ‘climate technology movement’ around the brand and that can sometimes damage this investment. Bitcoin has not really turned out to be a stable, non-manipulable digital currency. Tesla stands for a brand that is moving the world towards cleaner sources of energy and trade, Bitcoin with its current carbon footprint is a different story. Mining Bitcoins with computers is not an energy efficient activity. Because it requires so much energy, it emits a lot of CO2. Perhaps that’s why Musk has just launched a competition to come up with the solution to remove CO2 from the air.
The costs per transaction from an energy intensity point of view have only intensified. I don’t see how those things merge, climate and crypto.
according to an investor
Tesla major Bitcoin player
The investment equals Tesla as one of Bitcoin’s largest corporate hodlers, representing a large portion of the company’s $ 19 billion in cash and cash equivalents.
“Given the size of their treasury, it feels irresponsible,” wrote an investor whose company supported Tesla from the very beginning. Certainly because this investment is equal to Tesla’s entire R&D expenditure for 2020. And, of course, Musk has made a name for himself by operating on the edge of what is technically possible and setting the trend of what will later become operationally common. This also made him the richest man on earth.
Wall Street
The guys on Wall Street, not afraid of making large risky investments, also criticized the big bet on the digital currency. A manager who was not authorized to speak to the press, but nevertheless did: “It’s no different than a big company throwing cash into a hugely volatile emerging market currency.” The volatility of the digital currency can affect Tesla’s results, but it can also affect customers if they use the currency to buy a car.
And let’s not forget, Musk can make or break a business with one simple tweet. He can therefore also help with the price of an already volatile currency. And whether regulators are so happy with that?
