MarketGauge Group, Managing Director, Michele Schneider on her prospects for bitcoin and the oil industry.
Tesla Inc. CEO Elon Musk said the inability to receive a return on his company’s cash was behind the decision to buy $ 1.5 billion in bitcoin.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| TSLA | TESLA INC. | 781.65 | -5.73 | -0.73% |
“If fiat currency has negative real interest, only a fool would not look elsewhere,” Musk tweeted Thursday night.
Real interest rates are negative if the inflation rate exceeds the nominal interest rate. However, real yields have been moving higher in recent weeks as investors fear the unprecedented amount of fiscal and monetary stimulus will bring inflation back. The real return for ten years was about -0.8% on Friday, while the 30 year real return turned positive.
TESLA BUYS $ 1.5 Billion BITCOIN, STARTS ACCEPT FOR MOTORS
Tesla announced the purchase of $ 1.5 billion bitcoin earlier this month in an effort to ‘further diversify and maximize’ the return on its cash. Tesla ends 2020 with $ 19.38 billion in cash and cash equivalents, as noted in an SEC filing. It also noted that it may soon accept bitcoin as payment for its cars.
Tesla said it could invest more of its cash in digital assets, gold, gold-traded funds and other assets.
ILHAN OMAR’S FINANCIAL TRANSACTION TAX WILL DAMAGE MAIN STREET: GAMESTOP OBJECTIVES
The Fed has said interest rates will remain low until at least the end of 2023.
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Musk’s decision to add bitcoin to Tesla’s balance sheet follows an exchange he had with Michael Saylor, CEO of MicroStrategy, who announced in December that his company had built up the $ 1.3 billion cryptocurrency. has.
MicroStrategy this week announced plans to raise $ 900 million through a convertible debt sale, saying it will use the proceeds to buy more bitcoin.
“Bitcoin is almost as big as money,” Musk said. “The key word is ‘almost’.”