- Tesla’s bitcoin bet may have been influenced by Elon Musk and Michael Saylor’s Twitter exchange.
- The MicroStrategy CEO told Time magazine Tesla’s decision was an inflection point for bitcoin.
- Saylor said it isn’t “appropriate business decorum” to publicly discuss conversations with another CEO.
Late last year, Musk had tweeted a lewd meme painting of a monk praying with his eyes closed, while a woman in the background acts as a metaphor for bitcoin in an attempt to tempt him.
Saylor replied to Musk’s post, saying that he should do Tesla’s shareholders a “$100 billion favor” by converting the company’s balance sheet from dollars to bitcoin. “Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor,” he wrote.
Musk responded with a query about whether such large transactions are possible, to which Saylor said “yes” and that he was willing to share his playbook with the Tesla boss.
A little over a month after their casual chat, Tesla revealed its biggest bitcoin endorsement to date and announced that it would not only invest $1.5 billion into the world’s most popular cryptocurrency, but it would also soon begin to accept crypto payments for its products. The automaker used crypto exchange Coinbase to make its bitcoin purchase, according to The Block.
Calling Tesla’s move an “inflection point,” Saylor said the narrative around belief in bitcoin quickly changed from skepticism to growing acceptance. He further said it isn’t “appropriate business decorum” to comment on conversations with a CEO of another public company, but accepted that their Twitter exchange had an impact on Tesla’s decision.
Saylor refuted the idea that bitcoin is an example of irrational investor exuberance, which involves enthusiasm over news of price increases. “If you’re looking for an example of real speculation, it would be people speculating upon whether they can squeeze others in a short squeeze and a small stock, like GameStop,” he said. “Bitcoin is not speculation, O.K.? Bitcoin is a unique new technology, it’s like the Facebook of money, or the Google of money. And it grew from nothing to a trillion dollars in monetary value in 12 years.”
Bitcoin was last trading flat at $57,380 in early European trading on Monday, but it’s up about 95% year-to-date and more than 885% in the last 12 months.
Marc Lichtenfeld, a chief income strategist at The Oxford Group, said it is shocking that CEOs of publicly traded companies are purchasing billions of dollars’ worth of bitcoin with shareholder capital. “Should bitcoin fall in price, shareholders will be hurt significantly,” he said. “And I suspect executives and directors will be hauled into court.”