Penn Economics
  • Home
  • Penn...After Hours
    • News Archives
  • The Penn Portfolios
  • Contact
  • Blog
  • Financial Terms & Concepts
  • Art & Collectibles
  • Cash & Fixed Income
    • Corporate Bonds
    • Currency Trading FOREX
    • Sovereign Debt & Global Fixed Income
    • Municipal Bonds
  • Commodities
    • Coffee & Cocoa Beans
    • Cryptocurrencies
    • Grains
    • Sugar
  • Communications Services
    • Interactive Media & Services
    • Media & Entertainment
    • Telecommunication Services
  • Consumer Discretionary
    • Automotive
    • Consumer Electronics
    • Homes and Durables
    • Hotels, Resorts, & Cruise Lines
    • Leisure Equipment, Products, & Facilities
    • Restaurants
    • Multiline Retail
    • Specialty Retail >
      • E-Commerce
    • Textiles, Apparel, & Luxury Goods
  • Consumer Staples
    • Beverages & Tobacco
    • Drug Retail
    • Food & Staples Retailing
    • Food Products
    • Household & Personal Products
  • Economics
    • Economic Outlook
    • Demographics & Lifestyle
    • Education & Training
    • Goods & Services
    • Happiness Index
    • Housing
    • Supply, Demand, & Prices
    • Work & Pay
  • Energy
    • Energy Commodities
    • Energy Equipment & Services
    • Exploration & Production
    • Integrated Oil & Gas
    • Oil/Gas Refining, Storage/Transport
  • Financials
    • Capital Markets
    • Commercial Banks
    • Consumer Finance
    • Insurance
  • Global Strategy
    • Trade
    • Africa
    • Australasia
    • East & SE Asia
    • Europe
    • Global Debt
    • Global Health Threats
    • Global Organizations & Accords
    • Latin America
    • Middle East
    • Russia
    • South Asia
    • War on Terrorism
  • Health Care
    • Biotechnology
    • Health Care Facilities
    • Health Care Providers & Services
    • Life Sciences Tools & Services
    • Medical Devices Equip & Supplies
    • Pharmaceuticals
  • Industrials
    • Aerospace & Defense
    • Airlines
    • Business & Professional Services
    • Construction & Engineering
    • Industrial Conglomerates
    • Robotics & Industrial Machinery
    • Maritime
    • Road & Rail
    • Trading Companies and Distributors
    • Transportation Infrastructure
  • Information Technology
    • Application & Systems Software
    • Technology Hardware & Equipment
    • Cybersecurity
    • Electronics Equipment & Components
    • IT Software & Services
    • Semiconductors & Equipment
  • Materials
    • Chemicals
    • Construction Materials
    • Metals & Mining
  • Real Estate
    • Management & Development
    • REITs >
      • Hotel & Resort REITs
      • Retail REITs
      • Specialty REITs
  • Utilities
    • Alternative Energy
    • Electric Utilities
  • Wall Street
    • Corporate Governance
    • Global Exchanges & Indexes
    • Market Pulse
    • Market Risk Management >
      • Market Downturns Cause & Effect
  • Washington Report
    • Fiscal Policy
    • Government Watchdog
    • Judicial Watch
    • Media Malpractice
    • Monetary Policy
    • National Security
    • Trade Policy

Cryptocurrencies


Tesla shifts $1.5 billion of its cash reserve to Bitcoin, will accept the crypto as a payment source soon
(09 Feb 2021) Going into the new year, $800 billion EV juggernaut Tesla (TSLA $854) had about $19 billion sitting in cash reserves. In a move that GM or Ford would never consider making, the firm revealed—via an SEC filing—that it has placed about $1.5 billion of that amount, or roughly 8%, in the cryptocurrency Bitcoin. Let there be no doubt, Bitcoin is not a currency; rather, it is a commodity. Forget the comparisons to the US dollar, compare it to gold or silver instead. The dollar is worth a dollar today, yesterday, and (hopefully) tomorrow. Certainly, its value will fluctuate, but it will not go up 60% in one month like Bitcoin has. Governments can print currencies 24/7, effectively reducing their value, but only 21 million bitcoins can be mined—and 18.6 million digital coins already exist. So, is there anything wrong with Tesla's cash management experts shifting 8% of the company's reserves into the commodity? We don't believe so. After all, they could also buy (based on their SEC filings) gold or silver as a store of cash. Given Elon Musk's belief in the future of cryptos, the move shouldn't be surprising. Furthermore, investors applauded the move: both Bitcoin and TSLA were trading higher following the announcement. The company also announced plans to accept Bitcoin as a means of payment in the near future. We were true Bitcoin skeptics at first, but as soon as big payment processors like PayPal and Venmo got in the game, and as soon as we started looking a the non-physical product as a commodity rather than a currency, we warmed up to the crypto. Our biggest concern is this: Although only 21 million bitcoins will be mined, nothing will stop new, competing cryptocurrencies from being "discovered" in the digital world.

Content copyright 2021, Penn Wealth Publishing, LLC.  All rights reserved.

Location

Disclaimer

Any opinions expressed are those of Penn Wealth Publishing, LLC and are current only through the date posted.  We reserve our First Amendment right to use parody, sarcasm, satire, and irreverent humor to analyze the current state of business, finance, domestic issues, and global affairs; and to speak freely, outside the zeitgeist of political correctness.  These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed.  Past performance is no guarantee of future results.  Always consult your investment professional before investing any money. All attempts to ensure accuracy in the data provided have been made, but always verify at the source before investing. This site is for informational purposes only; Penn Wealth Publishing, LLC is not responsible for any losses incurred. 

Contact Us

Sign Up Now
For Email Newsletters you can trust.
Become a Member!
  • Home
  • Penn...After Hours
    • News Archives
  • The Penn Portfolios
  • Contact
  • Blog
  • Financial Terms & Concepts
  • Art & Collectibles
  • Cash & Fixed Income
    • Corporate Bonds
    • Currency Trading FOREX
    • Sovereign Debt & Global Fixed Income
    • Municipal Bonds
  • Commodities
    • Coffee & Cocoa Beans
    • Cryptocurrencies
    • Grains
    • Sugar
  • Communications Services
    • Interactive Media & Services
    • Media & Entertainment
    • Telecommunication Services
  • Consumer Discretionary
    • Automotive
    • Consumer Electronics
    • Homes and Durables
    • Hotels, Resorts, & Cruise Lines
    • Leisure Equipment, Products, & Facilities
    • Restaurants
    • Multiline Retail
    • Specialty Retail >
      • E-Commerce
    • Textiles, Apparel, & Luxury Goods
  • Consumer Staples
    • Beverages & Tobacco
    • Drug Retail
    • Food & Staples Retailing
    • Food Products
    • Household & Personal Products
  • Economics
    • Economic Outlook
    • Demographics & Lifestyle
    • Education & Training
    • Goods & Services
    • Happiness Index
    • Housing
    • Supply, Demand, & Prices
    • Work & Pay
  • Energy
    • Energy Commodities
    • Energy Equipment & Services
    • Exploration & Production
    • Integrated Oil & Gas
    • Oil/Gas Refining, Storage/Transport
  • Financials
    • Capital Markets
    • Commercial Banks
    • Consumer Finance
    • Insurance
  • Global Strategy
    • Trade
    • Africa
    • Australasia
    • East & SE Asia
    • Europe
    • Global Debt
    • Global Health Threats
    • Global Organizations & Accords
    • Latin America
    • Middle East
    • Russia
    • South Asia
    • War on Terrorism
  • Health Care
    • Biotechnology
    • Health Care Facilities
    • Health Care Providers & Services
    • Life Sciences Tools & Services
    • Medical Devices Equip & Supplies
    • Pharmaceuticals
  • Industrials
    • Aerospace & Defense
    • Airlines
    • Business & Professional Services
    • Construction & Engineering
    • Industrial Conglomerates
    • Robotics & Industrial Machinery
    • Maritime
    • Road & Rail
    • Trading Companies and Distributors
    • Transportation Infrastructure
  • Information Technology
    • Application & Systems Software
    • Technology Hardware & Equipment
    • Cybersecurity
    • Electronics Equipment & Components
    • IT Software & Services
    • Semiconductors & Equipment
  • Materials
    • Chemicals
    • Construction Materials
    • Metals & Mining
  • Real Estate
    • Management & Development
    • REITs >
      • Hotel & Resort REITs
      • Retail REITs
      • Specialty REITs
  • Utilities
    • Alternative Energy
    • Electric Utilities
  • Wall Street
    • Corporate Governance
    • Global Exchanges & Indexes
    • Market Pulse
    • Market Risk Management >
      • Market Downturns Cause & Effect
  • Washington Report
    • Fiscal Policy
    • Government Watchdog
    • Judicial Watch
    • Media Malpractice
    • Monetary Policy
    • National Security
    • Trade Policy