Bitcoin Goes Mainstream
Last Monday, Crypto Twitter broke into a frenzy when Tesla announced they added $1.5 billion in Bitcoin to their balance sheet. The company invested $1.5 billion out of its $19 billion cash on hand (almost 8%) for “more flexibility to further diversify and maximize returns on our cash.” In addition, Tesla also announced that they would start to accept bitcoin as payment for their products - becoming the first major automaker to do so.
Tesla's blockbuster announcement on Monday was just the first domino as other companies stepped up to offer their stamp of approval for Bitcoin:
MasterCard will let merchants accept payments in crypto this year. A financial behemoth that performed 4 billion transactions in 2019, they represent Bitcoin's most mainstream platform yet.
The US' oldest bank, BNY Mellon, announced last Thursday it will hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset-management clients.
The rumor mill is churning out the next possible adopters with names like Apple, Twitter, GM, and Uber all being mentioned as likely adopters.
All these announcements pushed the price of Bitcoin to record highs of more than $48,000. Here are a few trends we can expect as a result of this mainstream adoption:
Bitcoin is solidified as a serious investment vehicle. With the approval of multiple key financial players and leading Fortune 500 companies, Bitcoin is no longer just something that your shady cousin wants you to get in on - it's something your shady banking friend wants you to get in on too.
Bitcoin will be increasingly accepted as payment: Increased adoption of bitcoin can lead to an increase in price stability. As prices stabilize, bitcoin is expected to be used more widely as a payment option. With companies like Tesla and MasterCard leading the way, other companies are sure to follow.
The rise and increased interest in Central Bank Digital Currencies: China is already creating a digital currency and as Bitcoin and cryptocurrency adoption becomes more mainstream, we might see an influx of other Central Banks start to contemplate CBDCs more seriously.
This article was written for my school’s Consulting Club’s newsletter RCG Insights. Check out RCG Insights here.