Tesla Buys Bitcoin… Should You?
After all of the craziness we’ve seen in 2021 — and we’re barely more than a month in — it has been a slow news day to start this week. There is one headline, however, that is dominating the news: Tesla buying Bitcoin.
I sat down with trading experts Roger Scott, James West and Adam Sarhan for our Monday-morning roundtable. Tesla Inc. (Nasdaq: TSLA) and Bitcoin USD (BTC-USD) were certainly the topic of the day.
Just days after Tesla CEO Elon Musk added “#bitcoin” to his Twitter profile, it was announced in an SEC filing that the company bought $1.5 billion worth of the cryptocurrency.
Since the announcement, Bitcoin’s price has jumped to a record high of over $44,000 — up 17%.
Musk’s company has been a trendsetter in the electric vehicle market, while other manufacturers just try to keep up. Now as Tesla buys Bitcoin in a huge amount, the company is all aboard the cryptocurrency train.
Should you hop on too?
Tesla Buying Bitcoin Has Started a Trend
Ever since PayPal Holdings Inc. (Nasdaq: PYPL) validated Bitcoin, we’ve seen bigger companies hop on — and Tesla is just the latest.
The public seems to love the move, but Roger and Adam are a little more cautious.
Bitcoin has always been one of the more volatile things to trade. With this increased price comes more volatility… Because of that, Roger still advises sticking with the low-hanging fruit.
The key is to be aware of what phase the trade is in. With Tesla buying Bitcoin, are you early to the party? Or did you come at the end?
An example is what we saw with the GameStop Corp. (NYSE: GME) short squeeze — which I explained last week. By the time the stock became a good short, you weren’t allowed to do so anymore.
A 17% jump in Bitcoin price in a day, doesn’t seem like you’re early to the party if you buy now…
Come see what we think at our Monday-morning roundtable as we give our thoughts on Tesla buying Bitcoin and the stock market as a whole.
Feel free to email your trading questions to jeff@joyofthetrade.com and make sure to subscribe to my YouTube channel. I will also be appearing on cheddar.com Thursday, Feb. 11, to discuss jobless claims, so make sure you tune in!
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