Was Elon Musk hyping DOGE so Tesla could buy BTC cheaper?

Tesla CEO Elon Musk was hyping dogecoin (DOGE) while Tesla was buying up $1.5 billion of bitcoin (BTC) for their treasury.

Was Elon Musk hyping DOGE so Tesla could buy BTC cheaper?

Tesla CEO Elon Musk was hyping dogecoin (DOGE) while Tesla was buying up $1.5 billion of bitcoin (BTC) for their treasury.

Tesla has become the latest major corporation to make an investment in bitcoin, spiking the world's leading digital currency from $39,000 to $47,600 on Monday, a remarkable 22% rise in a single day, proving once again that people will follow Elon Musk to the moon, Mars, and anywhere beyond. Tesla purchased $1.5 billion of bitcoin (BTC) and announced that it expects to begin accepting payment in the cryptocurrency for its products in the future, then they deployed today.

Tesla now accepts cryptocurrencies.

However, on December 20, Musk joked about bitcoin being “almost as bs as fiat money" at the same time that Tesla was looking to diversify Tesla’s exposure to U.S. dollars. Elon doesn't try to manipulate prices, does he?

relates to The Tesla-Bitcoin Singularity Is Here at Last

Musk continued to pump DOGE with a series of meme-inspired backing of Dogecoin and its future. Dogecoin was briefly the number 10 digital currency by market cap this week, according to CoinMarketCap. Tweets from rapper Snoop Dogg help boost its price to an all-time high.

Tesla's decision was described by many finance geeks as unnecessary addition of risk on the balance sheet in the form of currency or a commodity. But to others, Tesla’s $1.5 billion investment in bitcoin is a hedge against the U.S. Dollar as the #1 global reserve currency. It's hard to ignore the upsides and diversification aspect. Tesla obviously sees bitcoin as a chance to diversify its cash and cash-equivalent holdings and give them a chance to provide operational liquidity and generate returns while limiting risks.

Of course, there's risk this doesn't work out. Tesla wrote, “we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity,” according to Bloomberg, “If we hold digital assets and their values decrease relative to our purchase prices, our condition may be harmed.

One eToro analyst said that there are unconfirmed talks about technology behemoths Apple and Google-parent Alphabet making moves on bitcoin this week, but this doesn't appear substantiated. Musk is viewed as an innovator tied to Tesla and space exploration with SpaceX, but keep in ming he has a deep background in payments and probably feels the most FOMO on bitcoin's meteoric rise.

“Corporate adoption takes another leap forward with Tesla announcement,” writes Devin Ryan, analyst at JMP Securities.

Meanwhile, stakes couldn't be higher for Tesla. They were recently added to the S&P 500, giving them added scrutiny from U.S. regulators, and this week they have been summoned by Chinese authorities citing complaints about quality issues, a warning shot to Tesla shareholders. Pairing the most speculative car company in the world with the most speculative asset class in the world felt inevitable. Buy Tesla's stock to buy bitcoin indirectly.

Buy Tesla's stock to buy bitcoin indirectly.

The move raises the usual questions about Tesla’s governance. Apart from the speculative nature of the bet, the fact that CEO Elon Musk has been tweeting heavily about cryptocurrencies — especially Dogecoin (DOGE) — while Tesla was buying up BTC — might be alarming to regulators and investors. But betting against Musk has never been a good idea, even for regulators.

DOGE is up 100% in the last week, currently trading at $0.0726, with a market cap exceeding $9.4 billion. DOGE is far more speculative and symbolic than it is functional. But if we can get a meme coin to $10 billion valuation for fun, it's nearly impossible for Wall Street, banks, governments, and other institutions to dismiss cryptocurrencies as the future.