Why Bitcoin is So Hot

MicroStrategy’s (NASDAQ:MSTR) dangerous leverage on bitcoin is paying off several times over. The company upsized its debt to $900 million to buy Bitcoin. When the cryptocurrency reached a $1-trillion market cap last week, MSTR’s CEO looks like a genius.

Tesla’s (NASDAQ:TSLA) CEO also tweeted bullish comments on dogecoin and bitcoin. The company will also accept crypto as a form of payment for its EV. Markets interpret the CEO’s bullish comments as a validation to buy the currency. The astute businessman will recognize that Tesla wants the rising value of a customer’s bitcoin.

Tesla wins either way.

It gets a customer who happens to hold the richly valued currency. In exchange for a Tesla EV, the company gets paid in cryptocurrency. This is rising in value.

Given the continued monetary easing and zero interest rate environment, cryptocurrency values will rise exponentially throughout 2021. This further validates the rising store of value for Bitcoin, fueling more demand. Investors who FOMO – fear of missing out – Bitcoin, will capitulate and buy. The increased demand will raise the value further.