This year, Bitcoin has already doubled in value. This surge was largely attributed to high-profile investors like Elon Musk. His corporation invested $1.5 billion in February via Coinbase. Clearly, this platform is becoming the number one system for the corporate audience. It allows you to buy, sell and exchange Bitcoins for US dollars.
The electric car manufacturer could have made a different choice, as there are many other exchanges. In fact, there are thousands of platforms worldwide. Coinbase has a deep-pocketed clientele, and it is expected to attract even more companies. For Tesla, the move was meant to “diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity”, according to its SEC filing.
Details of the Deal
Little is known about the operation. Some sources claim the gigantic purchase was split between several OTC trading desks. The execution took several days. This is similar to the execution model for MicroStrategy, which bought $425 million worth of Bitcoin in 2020.
Elon Musk And Coinbase
Musk is the biggest crypto advocate. He has not spoken publicly about his preference for Coinbase, but Tesla’s investment is a clear indication. On Twitter, the billionaire has also agreed that Coinbase should embrace Dogecoin soon.
This meme-based currency is still largely perceived as a joke. However, the CEO is even planning to get a Shiba Inu, the dog breed featured on the coins. It is also supported by Snoop Dogg, Gene Simmons, and Mark Cuban. At the moment, you can only trade Dogecoin on Binance.
Coinbase is confident about its potential. It is rumored to be worth about $100 billion. This year, it is planning to go public. NASDAQ has already been chosen as its listing venue. Some sources claim the company renders services to more than 5 corporations from the Fortune 500 list. With support from high-profile investors, the appeal is irresistible to many.
Today, users can buy, sell and exchange their Bitcoins for US dollars easily. They can withdraw their funds to a bank account in a couple of clicks. Coinbase could easily become the leading exchange in terms of revenue. But what about Bitcoin itself?
Bitcoin Price Projections
The currency has already reached $65,000 since the beginning of the year. By the end of 2021, it is expected to cost over $100,000, according to Forbes. Bloomberg strategist Mike McGlone even expects a high of $400,000. Many experts attribute the latest surge to corporate investments and institutional adoptions, and they expect it to continue.
Now, Wall Street banks are expressing interest. JP Morgan is going to let clients invest in a Bitcoin fund, and PayPal has announced support of several cryptocurrencies. Clearly, the demand is growing. Given the limited supply of coins, the price is likely to follow suit.