Tim Draper, a billionaire bitcoin (BTC) investor who also invested early in Tesla, responded to the company’s CEO and the world’s richest man, Elon Musk, by adding #Bitcoin to his Twitter résumé to join as Twitter CEO Jack Dorsey and Reddit Contributor . Founder Alexis Ohanian.
Draper, who is said to own around 30,000 Bitcoins, told Musk that he wanted to pay for Cybertruck Tesla with BTC, and was promoting his OpenNode company to process Bitcoin. He said:
Hi Elon Musk, I want to buy a Tesla car online. While I personally prefer to keep my # bitcoin, you can accept #bitcoin through our Draper VC OpenNode company. ”
On January 29th, Bitcoin rose 14% in just 30 minutes shortly after Elon Musk supported Bitcoin on social media.
Many have speculated that Musk may have been the largest investor behind Bitcoin’s massive hoarding of Coinbase last week.
In recent days, Coinbase’s premiums have increased to around $ 200 compared to Binance. This usually indicates significant buying activity for US investors.
However, Musk did not follow up on the change to the bio, and the overnight rally was halted. Bitcoin rose from $ 33,000 to more than $ 38,000, down to $ 33,000.
Draper may have tweeted Musk due to Musk’s interest in Bitcoin and positive market sentiment towards BTC.
In a recent interview with CNBC, Draper said he is already buying more Bitcoins. Draper also said that he has no intention of selling Bitcoin in the future, and expressed his strong belief in Bitcoin as the “currency of the future.” He said:
“In fact, I only buy more [Bitcoins] … I have no interest in selling my Bitcoins for the dollar. Why should I take the future currency and sell it for the currency of the past?”
Online data shows that Draper isn’t the only one focused on long-term profits. In fact, “HODLing” activity, which indicates that Bitcoin investors intend to hold BTC for an extended period, has reached an all-time high.
Will Bitcoin be used as currency?
Bitcoin is increasingly being seen as a valuable and alternative store of gold as a safe haven. However, the correlation and inverse correlation between Bitcoin, gold and stocks has declined in recent months.
Bitcoin Correlation Against S & P500, VIX, DXY, Gold. Source: Data on digital assets.
In addition to the big price increases, concerns about inflation and a large infusion of liquidity from central banks have created great interest among high-value institutions and investors.
But as the adoption of BTC has become more and more popular, the question remains whether Bitcoin will be used as a currency and medium of exchange like the dollar today.
Ironically, when the bitcoin price has a clear uptrend, investors are less likely to sell or use bitcoin. Draper himself suggests that he will likely pay $ 40,000 for an e-truck in dollars, not “the currency of the future.”
However, if the price of bitcoins stabilizes at a sufficiently high price level in the future and volatility decreases, bitcoins may become more attractive for daily payments.
Meanwhile, as the network is gaining more users and needs to expand, the Bitcoin blockchain network may eventually become ineffective for use in first-level daily payments.
At this point, second-tier scaling solutions such as Lightning Network and sidechains like Liquid, for example, could become blockchain “apps” to process small payments instantly. Such interoperable platforms are likely to have trade-offs of their own, with varying degrees of trust, privacy, and decentralization.