Tesla’s $1.5B Bitcoin buy throws the cat amongst institutional pigeons

Not all analysts are convinced that Tesla’s recent $ 1.5 billion acquisition of Bitcoin (BTC) will be as beneficial to the tech giant as it has been for the price of BTC.

Saxo Bank’s head of equity strategy, Peter Garnery, wrote in a research note that Elon Musk had exposed Tesla and its investors “to enormous risks”, as reported by Reuters on February 11th.

“Elon Musk exposed Tesla to significant market risks,” Garnery wrote, adding that the main concern for investors was assessing Bitcoin’s long-term value, given the extreme market volatility it has experienced since its inception.

Elsewhere, former Goldman Sachs CEO Gary Black Advertise To Twitter followers on February 8 he shut down the positions it kept at Tesla Inc ($ TSLA), citing the company’s “riskier capital allocation” among its reasons.

Bitcoin’s value rose 20% within 24 hours right after news of Tesla’s acquisition of $ 1.5 billion, triggering a renewed boom in the cryptocurrency market leading to all-time highs for Bitcoin, Ether (ETH) and many more. Meanwhile, Tesla’s share price declined 7.5% in subsequent trading days.

At the same time, it was reported that Brett Winton, Research Director at ARK Invest, which allocated 8.75% of its portfolio to Tesla stock, said the investment represented “an appropriate use of cash”, adding: “We are comfortable with the way in which we anticipate situations in which we place our clients. In front of her. “

Grayscale CEO Michael Sonnenshein recently suggested that Elon Musk’s public acquittal of Bitcoin would spark a “race” for investment by institutional buyers and other tech “insights”. Sonnenshein said Grayscale, which has a vested interest in the matter at hand, has seen stronger inflows move into 2021 than were recorded during the record-breaking 2020 year.