Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, Calif., on March 14, 2019. Tesla announced on Monday it would invest $1.5 billion in cryptocurrency Bitcoin. Frederic J. Brown/AFP via Getty Images
Electric automaker Tesla and cryptocurrency Bitcoin have a lot in common.
Both have seen their market value skyrocket last year, defying skeptics and thrilling fans. Both are fueled by mass enthusiasm and techno-utopian idealism.
And they've both got plenty of doubters warning a giant crash could be on the horizon.
So when Tesla announced it would purchase $1.5 billion worth of bitcoin on Monday, and that it would accept the currency from customers in the future, it might have been tempting to dismiss this as an outlier — an oddball move from a company run by an eccentric CEO.
But Tesla is not the only mainstream company starting to take Bitcoin seriously. Asset manager BlackRock, life insurance giant MassMutual and payment companies Square and Paypal have all dipped their toes in the Bitcoin waters.
Meanwhile, enterprise software company MicroStrategy did more of a cannonball. The company's CEO, Michael Saylor, describes himself as a bitcoin evangelist. Last year he took pretty much all of the company's cash and put it into Bitcoin. Then he borrowed even more money and put that into Bitcoin, too.
"People that didn't like Bitcoin, they thought we were crazy," he says. "But the people that like Bitcoin thought that was brilliant, and the shareholders liked it."
That's an understatement. MicroStrategy's stock has skyrocketed right alongside Bitcoin values.
In December, Saylor and Tesla CEO Elon Musk had an exchange on Twitter where Saylor recommended this strategy. Saylor wouldn't comment on whether he and Musk talked privately, too.
But he argues that any company with a lot of cash right now should consider Bitcoin, or another investment with bigger returns, because of how low the Federal Reserve has set interest rates.
"If there was no money printing," Saylor says, referring to the federal policies that are increasing the money supply, "and if the interest rate on short-term Treasuries was 5%, then maybe it would be responsible and prudent to invest your cash in short-term Treasuries."
As it is, with rates pegged near zero, he says money held in cash is doing no good for shareholders.
Tesla seems to have found the argument persuasive.
And the company isn't just putting a big chunk of cash into Bitcoin to seek returns. It's also planning to accept bitcoin for future car purchases.
That's welcome news to another Bitcoin enthusiast, David Gokhshtein, the founder of a cryptocurrency media site who has been tweeting at Elon Musk and asking for the ability to buy a Tesla with Bitcoin.
He doesn't actually want a Tesla.
"I'm a BMW guy," he says. "I like German cars."
But now that Tesla plans to accept the cryptocurrency, he swears he'll put his money where his mouth was. "I'll be ordering either a Roadster or a Cybertruck," he says.
He's delighted because, if Tesla does start accepting bitcoin, it would be a meaningful way to use the cryptocurrency as a real-world currency — not just a speculative investment vehicle.
And for Bitcoin believers like him, that's the whole point of creating a decentralized, digital currency.
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