Saturday, 17 April 2021

NEWS AND STORIES

Agency Report

As Nigeria shuts its doors, billionaire Elon Musk’s Tesla Inc drove Bitcoin toward mainstream acceptance on Monday after its disclosure it had purchased $1.5 billion of the cryptocurrency.

Musk said the company would soon accept it as a form of payment.

The announcements, buried deep in Tesla’s 2020 annual report, drove a 10% surge in the world’s most widely-held cryptocurrency.

Investors anticipated other companies will soon join a list of firms that invest in or hold bitcoin including BlackRock Inc, the world’s largest asset manager, and payments companies Square and PayPal.

Elon Musk buys $1.5billion of bitcoin

Nigeria’s Central Bank last week warned banks to steer clear of the digital currency.

Musk has upended Wall Street over the last year and briefly became the world’s richest person as shares of Tesla surged nearly 500% to become the fifth most-valuable U.S. company, leaving other companies and investors eager to follow in his wake.

“If any lesser mortals had made the decision to put part of their balance sheet in Bitcoin, I don’t think it would have been taken seriously,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

READ ALSO BBNaija housemates rewarded with $500 worth Bitcoin

“But when the richest man in the world does it, everyone has to take a second look.”

The news sparked heavy trading in cryptocurrencies and caused exchanges like Coinbase, Gemini, Binance to experience technical issues, according to Coindesk here.

A well-known supporter of cryptocurrencies, Musk has weighed in regularly on the past month’s frenzy in retail investment, also driving up prices of the meme-based digital currency dogecoin and shares of U.S. video game chain GameStop.

He said a week ago that bitcoin was “on the verge” of being more widely accepted among investors, and in December asked if it was possible to do large transactions in the currency.

In late January, Musk changed the bio of his Twitter account, which has 46 million followers, to include #bitcoin.

Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash, including holding gold.

READ ALSO Elon Musk overtakes Jeff Bezos as world’s wealthiest person

The report said it ended 2020 with $19.38 billion in cash and cash equivalents.

Gold jumped more than 1% Monday while ethereum, another cryptocurrency, surged to a record high.

LONG-TERM STORE OF VALUE?

Central banks remain skeptical of digital currencies, but analysts say the more real world uses appear for bitcoin, the more attractive it will prove as a long-term store of value.

Bitcoin surged more than 10% to a record high of $43,625 after Tesla’s disclosure.

“The argument for bitcoin is evolving. It used to be negative (reasons to buy) but suddenly there are positive reasons, and that’s why you see bitcoin at (new highs),” Mohamed El-Erian, chief economic advisor of Allianz, told CNBC.

Tesla is the latest company to add bitcoin to its corporate treasury, following similar moves by Square, the payments company led by Twitter Inc chief Jack Dorsey and U.S. software firm MicroStrategy Inc.

PayPal said in October that it would allow customers to buy, sell and hold bitcoin and other virtual coins using its online wallets. It remains to be seen whether bitcoin will see greater adoption as a form of payment, something that it has traditionally struggled to achieve.

READ ALSO Cow ranching business better than cryptocurrency – Adamu Garba

“If this becomes a trend in corporate treasuries the downside of staying on the sidelines will only become costlier over time,” said Maya Zehavi, a blockchain consultant.

Musk has also endorsed other cryptocurrencies. He gave dogecoin, the coin based on a popular internet meme, a shoutout on Twitter last week, sending its price to record highs over the weekend.

Dogecoin was created largely as a satirical critique of the 2013 crypto frenzy and is not taken as seriously as bitcoin or ethereum. It has almost doubled in value since Friday, hitting a record 8.71 cents, according to data on blockchain and cryptocurrency website Coindesk.

Published in Headliners

Xclusive Nigeria Television (XNTV)

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