Tesla and Morgan’s Impact on Interest in Cryptocurrencies

1 Tesla and Morgan’s Impact on Interest in Cryptocurrencies Tesla’s Investment in Bitcoin When Tesla announced its investment of $1.5 billion in Bitcoin, the value of the cryptocurrency increased from $7000 to over $35000 within a short period. The announcement

by Tesla created a social media movement, with the web searches containing the words Tesla, Bitcoin, and Elon Musk increasing tremendously. Also, the number of people tweeting using BTC and Bitcoin hashtags is increasing tremendously (Mironeanu et al., 2021). Further, Tesla's acceptance of Bitcoin as an acceptable currency for purchasing its electric cars also increased people's interest in Bitcoins. The announcement by Tesla of accepting Bitcoin as payment for their electric cars increased customers' confidence in customers (Mironeanu et al., 2021). Thus, the announcement by Tesla increased people's interest in cryptocurrency because people wanted to experience the conversation relating to Bitcoin.

The fact that Tesla invested in Bitcoin can influence other companies also to attempt to invest in the cryptocurrency. According to Shead (2021), Tesla’s share price increased tremendously after announcing its acceptance of Bitcoin as payment for its electric cars. Also, even if Tesla divested part of its investment in Bitcoin and announced that it would no longer accept Bitcoin as payment for its cars due to Bitcoin’s exacerbation of climate change, the company’s asset value of Bitcoin remained high. The economic gains of Tesla can encourage other companies to invest in Bitcoin to increase their investors’ value.

JP Morgan’s Acceptance In 2021, J.P. Morgan Bank became the first US bank to give access to Bitcoins to clients (Namcios, 2021). Other banks in the USA have limited access to Bitcoins to very rich clients with lots of cash and can diversify away the risks of investing in Bitcoin. J. P. Morgan bank's

2 Bitcoin services will extend to all clients seeking investment advisories, including self-directed clients who use the bank's commission-free trading mobile application (Namcios, 2021).

However, the bank will offer investment advice to clients seeking to invest in Bitcoin. Bank workers are not advised to recommend the investment to investors needing more cryptocurrency information.

The acceptance of J.P. Morgan Bank to give clients access to Bitcoin indicates the bank's acceptance that the cryptocurrency contains currency characteristics. For instance, Bitcoin can be used as a medium of exchange, a store of value that adheres to supply rules. As such, the acceptance will positively impact the demand for cryptocurrency by clients. People fear that Bitcoin may be more volatile than other public currencies offered by central banks of countries and that it is not legal tender. However, the growing interest in cryptocurrency may alleviate the fears, making it accepted by other banks in the USA and worldwide.

Perception of Bitcoin and other Cryptocurrencies and Future Prediction Many financial analysts around the world vehemently repulsed the discovery of cryptocurrency due to its nature of supply and its decentralized nature. However, the acceptance of cryptocurrency by various organizations such as Tesla and J.P. Morgan has created a turnaround since people have changed their perception of cryptocurrency as a Ponzi scheme and embraced it as a form of currency for making transactions. As such, the interest in cryptocurrency has grown, leading many people to invest in cryptocurrency. According to Mironeanu et al. (2021), the transnational nature of cryptocurrency, the modesty of fees, and the transparency of Bitcoin and another cryptocurrency will make the currency gain traction and be

3 embraced by many people and organizations around the world. Thus, the future may embrace cryptocurrency, and it may become one of the main currencies in the world.

Reflection I have learned about the factors influencing the demand and supply of currency. The acceptance of Bitcoin by Tesla and J.P. Morgan increased the demand for the cryptocurrency, increasing its value. Further, I have learned about the characteristics of currency that make them be demanded, including intrinsic value, legal tender, medium of exchange, and unit of account, among others. Cryptocurrency has yet to attain all the characteristics to be universally accepted.

References Mironeanu, A., Irimia, B., Sandulescu, V., Teodoroiu, C. (2021). The impact of Tesla's bitcoin investment and its plans to accept it as payment method on the evolution of bitcoin.

4 Proceedings of the International Conference on Business Excellence, 15(1):58-74, DOI:10.2478/picbe-2021-0007.

Namcios. (2021, July 22). JPMorgan Becomes The First Big Bank To Give Retail Clients Access To Bitcoin. Retrieved from Nasdaq: https://www.nasdaq.com/publishers/bitcoinmagazine Shead, S. (2021, March 24). Elon Musk says people can now buy a Tesla with bitcoin. Retrieved from CNBC: https://www.cnbc.com/2021/03/24/elon-musk-says-people-can-now-buy-atesla-with-bitcoin.html