October 2, 2022

Bitcoin Postpones Bearish Correction as Tesla Adds BTC Payment Option

3 min read

An overnight rate correction in the Bitcoin market after the Federal Reserve Chairman Jerome Powell’s testament stopped briefly midway as Elon Musk came to the rescue.

The renowned billionaire business owner announced early Wednesday that his company Tesla now accepts Bitcoin as payments for its electrical cars. He added that Tesla uses only internal and open source software as it runs Bitcoin nodes straight, therefore getting rid of the requirement of having a third-party custodian and payment service.

“Bitcoin paid to Tesla will be maintained as Bitcoin, not converted to fiat currency,” Mr. Musk validated.

The milestone announcement followed nearly a month after Tesla exposed in its securities filings that it purchased $1.5 billion worth of Bitcoin at some point in January 2020, when the cryptocurrency was trading inside the $30,000-40,000 price variety. BTC/USD had surged by nearly 60 percent after Tesla’s filing.

Bitcoin Price Jumps

The current Tesla statement raised expectations of a rally repeat in the Bitcoin market. Carl Eric Martin, a popular crypto-based Swedish Youtuber, said he is “super insanely exceptionally extraordinary bullish” on Bitcoin for the rest of 2021.

And a green candle flashed on the Bitcoin chart right after Mr. Musk’s tweet. The cryptocurrency climbed more than 1 percent, striking an intraday high above $55,600, balancing out the effect of Mr. Powell’s statement prior to Congress on Tuesday afternoon that lower cravings for riskier possessions.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin undergoes a rebound after the Tesla announcement. Source: BTCUSD on TradingView.com The Fed chairman said he expects a strong economic recovery in the US this year after the vaccine rollout but worried that he does not anticipate Joe Biden’s $1.9 trillion stimulus package to trigger an unwelcomed increase in inflation. He also noted that the Fed has enough tools if inflation goes out of control.

As Bitcoinist covered previously, hardcore Bitcoin bulls base their upside forecasts on greater inflation rates caused by the Fed’s quantitative relieving programs and the US government’s trillions of dollars worth of coronavirus stimulus bundles, both of which decrease the US dollar’s purchasing power.

An improving economy gets rid of the requirement of selling the US dollar for riskier properties. That describes why the greenback surged on Tuesday while stocks and bitcoin fell amidst Mr. Powell’s testament.

Adoption Curve

On the other hand, the possibility of US dollar decline remains greater as the Biden administration prepares a $3 trillion federal government costs program to increase facilities, clean energy, childcare, and education.

It tends to benefit Bitcoin for its pro-scarce, anti-inflation functions as a gold-like safe-haven asset, triggering numerous analysts to say that more corporates would copycat Tesla’s investment into the cryptocurrency.

“Microsoft, Apple, Google, and Facebook would be ridiculous not to put at least 1% of their numerous billions in treasury properties (mostly held in very low yield govt bonds) in Bitcoin,” stated Vijay Boyapati, the author of the Bullish Case for Bitcoin. “Their treasuries are like a giant ice block subject to the relentless swelter of US inflation.”