Elon Musk Fuels Support For Cryptocurrency While Investors Disagree
Scroll DownTesla will become the first automaker to accept bitcoin according to their SEC filing. The auto company also bought $1.5 billion of the cryptocurrency. Musk, Tesla's CEO, is showing he feels bitcoin is a good investment and an easy way to process transactions. Economic advisors feel this will give bitcoin a boost, although it declined slightly after the announcement. Other altcoins also dipped at the same time.
JPMorgan Chase's strategists don't agree. They feel the cryptocurrency's highly volatile nature could put their customer's portfolios at risk. They are in the minority, however, as many strategists predict other companies will follow Musk's lead. There is speculation that tech giant Apple will be the next major company to adopt bitcoin.
Washington, D.C.-based Coin Center is an advocacy and research group for cryptocurrencies. They focus on public policy issues and ensuring regulations don't limit innovative blockchain technologies. Twitter CEO Jack Dorsey recently donated $1 million to the center, saying he is considering paying employees or vendors in bitcoin. Could Twitter be the next company to invest in the cryptocurrency?
Other altcoins rallied despite bitcoin's slight price drop. Some token's advancements in layer 2 blockchain technology are said to be responsible for the rallies. With Layer 2, computations are completed off the first layer of the blockchain to save resources. Only one or two computers are working on the transaction instead of all the computers in the network. Expanding transactional capacity will certainly bring about wider adoption of tokens like MATIC and AVAX.
With many financial institutions investing in cryptocurrencies this year, many smaller investors are starting to look at altcoins as a hedge against inflation. We can expect the advancements in new technology solutions to eliminate some of the hurdles to cryptocurrency investing as well. This year is already bringing big changes and wider adoption with more traditionally mainstream investors jumping on the cryprocurrency bandwagon.
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