The past week was filled with interesting developments. The Bitcoin bull run continues to dominate the headlines with big names in the world of finances sticking to cryptocurrencies and new ones taking tentative steps in the crypto investment world.
Yet, the question for the ordinary Bitcoin enthusiast, or even skeptic, is whether investors were smart to invest in Bitcoin.
Nobody makes a stronger case for the shrewdness of going into crypto than Tesla, which bought $1.5m worth of Bitcoin in January and is now estimated to have made more money out of this than it generated for an entire year of car sales.
Do the numbers add up? There is good reason to believe as much. Tesla invested in Bitcoin when the coin was being traded for anything between $29,000 and $37,000. This puts the coins owned by Tesla at potential 40,000 and Bitcoin is now trading at $58,383, at the time of reporting.
In comparison, Tesla registered $721m in profits from car sales in 2020. So yes, Tesla was clever about its investment. But it's not just Tesla that seems to be seduced by the appeal of crypto.
Earlier this week, we found out that Morgan Stanley is looking to assist clients in making the transition from FIAT portfolios to cryptocurrency assets.
The wealth management company is said to be offering the service to anyone who has at least $2m in their account history, and it's not the only one to show interest in converting its clients' portfolios to crypto.
Yet, as Tesla CEO Elon Musk cautions, it's important to diversify your risk and everyone should own crypto to some extent. While institutional investors are certainly piling on, they are not the ones driving the value of Bitcoin it seems.
In fact, retail investors are presently out-buying institutional investors insofar as BTC is concerned, and this is not at all surprising. With payment solutions such as PayPal and Visa offering support for blockchain payments, it's actually quite understandable why retail interest is spiking.
On the whole, making a move into Bitcoin has been a clever decision. However, Bitcoin is prone to ups and downs, and this is exemplified by the most recent liquidation of $500m worth of BTC in just 60 minutes as investors weren't quite ready to meet the margin calls.
Ultimately, only time can show if investments will pay off. Despite the coyness of mainstream institutional behemoths such as Morgan Stanley and JP Morgan, though, the world of big finances is finally falling on one specific side of the blockchain and crypto debate.
Owning some crypto is worthwhile, at least for now, or so big investors seem to think.