On Monday, Elon Musk sent shock waves through the financial markets. In its SEC filings, Tesla revealed a $1.5 billion investment in Bitcoin. This lead to a 16% surge for the most popular cryptocurrency. Monday’s value of $44,795.20 is a record-high for Bitcoin. At the same time, the value of Tesla shares increased by 2%. Also, the electric car manufacturer is expected to start accepting Bitcoin payments in the near future.

Major Bitcoin Investment by Tesla

As noted in the filing, Tesla aims to diversify and maximize the returns on the cash not used in the immediate maintenance of operational liquidity. They announced the plans to further invest in alternative reserve assets. This includes digital assets, old exchange-traded funds, and gold bullion.

Elon Musks Dogecoin, Bitcoin & Crypto Tweet

Dogecoin is the people’s crypto

— Elon Musk (@elonmusk) February 4, 2021

Recently, Musk has also expressed his support for another cryptocurrency. He had a series of tweets backing Dogecoin. As a result, this digital coin skyrocketing over the past few weeks. Created as a joke, Dogecoin now commands a $10 billion market capitalization.

The Big Short’s Michael Burry’s Skepticism

Many investors jumped on the Bitcoin following Tesla’s moves. Still, some financial experts remain skeptical of Musk’s strategy. The most vocal among them, Michael Burry. The founder of Scion Asset management is best known to the public from the oscar-winning movie The Big Short. In the movie, he was portrayed by Christian Bale. Burry was the first investor to predict and earn money on the subprime mortgage crisis of the late aughts. His billion-dollar bet was detailed in the book by Michael Lewis which later became the basis for the movie.

On Monday, Burry questioned the motivation behind Tesla’s investment. Also, he described the Dogecoin’s surge as a bubble about to pop. The boss of Scion Asset management noted the issues Tesla is going through in China. The manufacturer is currently facing a number of quality-related complaints in the Chinese market. Burry feels that the Bitcoin purchase is not much more than a smokescreen. Its goal is to divert the public attention from the company’s troubles in China. In one of his tweets on Tesla’s investment, he even used the hashtag #digitalconfetti. He mocked Musk for allegedly trying to reach a perfect correlation between Tesla and Bitcoin.

Bubble about to Burst

Burry was also recently in the news for unknowingly triggering the Gamestop short squeeze. His 2019 investment is thought to be the initial spark that led to the market frenzy last month. Now, he’s taking shots at a frenzy caused by another asset, Dogecoin. As we mentioned, this cryptocurrency reached a record-high after a series of Elon Musk’s tweets. Burry tweeted out: “A doge’s breakfast maybe”. He also left a link to a WSJ’s article about this digital currency. In the story, the Dogecoin’s creator himself calls the situation absurd and compares it to the Gamestop craze.

Michael Burry predicts that a sharp increase in the value and volume of this asset will soon be followed by a quick decline. He feels that these markets have bubbled over the safe limit. Burry is certain that we’ll witness a market crash sooner rather than later.

Summary

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Why Elon Musk Makes $1.5 Billion Bet On Bitcoin For Tesla

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On Monday, Elon Musk sent shock waves through the financial markets. In its SEC filings, Tesla revealed a $1.5 billion investment in Bitcoin. This lead to a 16% surge for the most popular cryptocurrency.

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Vladimir

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ArmyOfBitcoin.com

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