With the accelerated growth of the cryptocurrency market, whose current value is 224.79 billion dollars, specialists criticized the investment decisions of Elon Musk, CEO Tesla. Tesla’s investments spanned two cryptocurrencies, bitcoin and dogecoin, with general effects that raised the number of investments made in cryptocurrencies, even with the participation of companies like Twitter.
Ned Segal, CFO of Twitter, indicated that the company is considering adding bitcoin to its balance sheet, as well as making investments with said cryptocurrency. In this regard, he commented, this initiative arose in response to the decisions of Elon Musk to invest 1.5 billion dollars in bitcoin, after announcing it on his social networks.
Mike Novogratz, CEO of Galaxy Investment Partners (GIP), accused Elon Musk of generating speculation to incentivize investment in certain cryptocurrencies in a playful way, without regard to the consequences on the market. Novogratz highlighted the attitude of the CEO of Tesla towards the cryptocurrency dogecoin, created in 2013 by software engineers, since as a result of his comments on social networks, where he encouraged the purchase of units, its value reached the tenth place on the list of cryptocurrencies. Despite this, dogecoin has had a series of sharp ups and downs, which could affect retailers, investors and hobbyists looking to bet on the next big cryptocurrency.
Likewise, GIP indicated that Elon Musk uses social networks to make disinformation comments, which encourage hasty investment decisions. With respect to dogecoin and bitcoin, the volatility generated by Musk was similar to the fluctuation of shares generated by Reddit users investing in the video game chain GameStop, he added.
According to a study carried out by CoinDesk, a platform specialized in blockchain and cryptocurrencies, Elon Musk’s investment was a strategic measure in the face of questions about regulations in the Chinese market. CoinDesk commented, Tesla is the first automaker with proprietary plant operations within China, and they recently faced a wake-up call for irregularities and quality control. By making such an investment, indicated in the 10-K annual report, the company achieved a growth of 1.3% in market share, which reduced media attention considerably.
Faced with the repercussions of Elon Musk’s investment in the cryptocurrency market, India and Nigeria continue their efforts to implement state regulations. CoinDesk indicated, authorities from both countries seek to rush agreements to ban the use of cryptocurrencies in private initiative. For this reason, specialists in blockchain and Bitcoin commented that the current situation of cryptocurrencies supposes both a growth in their market, and a contemplation of restrictions in various countries.
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Colin has been working in the business industry for quite a sometime and he recently made the decision to become a full-time business journalist. At Daily Research News, he also helps us take care of the business writing.