24.10.2021

How will the $ 1.5 billion investment from Elon Musk’s Tesla company affect the future of bitcoin?

Tesla Elon Musk has  invested $ 1.5 billion in bitcoin . In the future, she intends to integrate the first cryptocurrency as a means of payment for products. Against the backdrop of the news, Bitcoin reached a new all-time high, breaking the $ 46,000 level .

Let’s analyze the opinions of experts on how this will affect the dynamics of bitcoin, and whether the previous tweets of Musk , against which the price of the asset has been growing all the time , will raise questions from regulators.

They disagreed in assessing the legality of Elon Musk’s tweets about Dogecoin and Bitcoin, after which the coins grew in value.

According to investor Dmitry Machikhin, such messages are the private opinion of a person not affiliated with a digital asset, and therefore, from the point of view of the law, it is impossible to find fault with Musk’s Twitter.

“We are talking about decentralized assets, they are not securities in the understanding of the US Securities and Exchange Commission (SEC) and fall outside the regulation of pump & dump schemes. For example, if Musk writes: “Sell Tesla shares, I’m tired of all this” and after that the shares fly down, where they will be bought off, then Musk will be invited to the SEC the very next day , “he explained.

Grigory Klumov, founder of the stable cryptocurrency platform Stasis, agrees with him:

“Anything that is not prohibited is permitted.”

A well-known trader named Whale Panda suggested that Musk tweeted Dogecoin so often because he couldn’t write too much about Bitcoin – “it would get him in trouble.”

Leading RoboForex analyst Dmitry Gurkovsky recalls that Musk’s access to a large audience can create excitement around a particular asset, be it cryptocurrency, GameStop shares or the manufacturer of the Cyberpunk 2077 game – CD Projekt. As a rule, after large-scale growth, these assets were adjusted towards the previous values.

“This situation, of course, is a“ headache ”for regulators, as they need to assess to what extent this or that message violates existing norms and whether it has been published for personal gain. In 2018, the SEC  fined Musk $ 20 million  for his tweets and forced him to step down as chairman of Tesla’s board of directors. Probably, this is not the last fine of a businessman for messages on social networks, ” Gurkovsky suggested.

Yuri Brisov, a member of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Lawyers’ Association, believes that if bitcoin participates in transactions upon receipt of investment profits, then such transactions may be subject to the law on stock exchanges and securities.

The expert did not rule out that the SEC may regard Elon Musk’s tweets as a broker’s activity without registration or an activity that violates the law on supply and advertising of securities.

“The violator can also be brought a private claim if the person who followed his advice incurred losses. The claim may be collective, from several victims at once , “Brisov explained.

Representatives of the cryptocurrency community are convinced that Tesla’s investments in Bitcoin will attract new investments from large players to the industry.

Anthony Pompliano, co-founder of venture capital firm Morgan Creek Digital, is confident that corporations will now definitely come to the market.

Cameron Winklevoss, co-founder of Winklevoss Capital and bitcoin exchange Gemini, called Tesla’s investment in bitcoin a forward-looking move.

His brother Tyler noted that the company’s investment in Bitcoin confirms that cash is “junk”, as Tesla chose to “exchange it for good money.”

Former head of the Office of the Comptroller of the Currency of the US Treasury Department, Brian Brooks,  said Tesla’s investment in bitcoin is “exciting news” for the crypto industry. For the rest of the people, “this is a little scary news,” as it is indicative of the depreciation of world currencies.

“Bitcoin is potentially a much more stable source of value in the long run ,” Brooks explained.

The potential acceptance of bitcoins as a means of payment for paying for Tesla products is undoubtedly a positive driver for the growth of the first cryptocurrency, adds Dmitry Gurkovsky, leading analyst at RoboForex:

“Perhaps, following Tesla and other companies included in the S&P 500, will seriously think about such an integration.”

The head of the data analysis department of CEX.IO Broker Yuri Mazur notes that the lightning-fast reaction of the market and the achievement of a new all-time high by bitcoin once again indicated the potential of the first cryptocurrency.

“Everything goes to the fact that the upward trend will continue, and in February the price of the asset may rise to $ 50,000 ,” he predicts.

Mazur cites $ 48,051 as the closest target:

“It can be quickly overcome if a new wave of investing in bitcoin from the corporate segment follows.”

The founder of the stable cryptocurrency platform Stasis, Grigory Klumov, adds that the Bitcoin bubble can be talked about at the level of $ 500,000 – $ 1,000,000 per coin.

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