It is always fun to have a look at what is being said in the mainstream media about Bitcoin and the crypto industry, with the bitcoin logo and references used as clickbait to draw people into the FUD and FOMO, depending on where they stand at the time on the subject.
Just yesterday I wrote a post as a "Warning to Elon and us all" that was a about the prosecution of John McAfee and how it is being used to send a message to others. That came from the same "news" outlet.
I came across this one as I flicked through a feed:
After setting up how Tesla bought 1.5B worth and how it has increased by about a billion in value since, the author then goes onto say how he thinks it is likely that Bitcoin will drop towards its fundamental value of zero. My first thought on this is - "dropped toward" zero means decreases in price, whether that drop is a dollar or 50,000, he is covered. The next is the "fundamental value", where the fundamental value of anything is zero when it comes to pretty much any kind of asset investment, as the market is driven by sentiment.
But, moving on from that, the title is justified is through a paragraph as to why he "stands to make" $200 million more than Elon Musk, in what is a highly flawed perspective.
If Bitcoin were to lose half its present value — which is not unlikely, given its extremely volatile past behaviour — Tesla will lose around A$1 billion. As Elon Musk owns about a fifth of Tesla, he would then be down A$200 million. In contrast, I own no Bitcoin so I will lose nothing, which means I will have done A$200 million better than Musk. source
Perhaps at first glance, this seems somewhat logical, where since he doesn't lose, he is up, but it doesn't work that way and it definitely doesn't mean "he made" anything, unless he bet against the increase of price to the tune where a 50% drop in the value of Bitcoin would net him 200 million dollars, which I suspect is not a bet he is able, nor willing to take even if he could get his hands on that kind of scratch.
Also, what this perspective would mean is if Bitcoin doubled in value, Elon Musk would be up 200 million dollars and the author would have lost 200 million, since he believes he "stands to make" in its fall in value. Yet as he said, *he owns n Bitcoin and has no bet against the drop, which makes the entire article ridiculous at its core, as:
He makes nothing. He loses nothing. He has nothing to do with bitcoin at all.
But even if he did own Bitcoin, tying his value in this way to the fortunes of Elon Musk's investment performance, also ties himself to the fortunes of Elon Musk. I suspect that the writer isn't among the richest in the world, and investments are relative, meaning that it is what one invests that will determine the return of gain and loss. It is about skin in the game and taking the risk.
Why Musk’s decision is a bad thing
Musk is not doing Tesla’s shareholders any favors. If they wanted to be exposed to the rise and fall of Bitcoin they could just buy some themselves. Now they have no choice; if they want to invest in Tesla electric vehicles, they are also vulnerable to the vagaries of Bitcoin. source
This slice is about exposing Tesla investors to the uncertainty of Bitcoin in what this person seems to think is a reckless move, as they could have bought it themselves. While I am biased, I think that Tesla has done the majority of them favors, as they wouldn't have bought it themselves, as it is a bourgeoning industry that most people have very little idea about, other than senseless articles such as this opinionated "journalist" has written. What this means, is that Tesla have spread the risk of the Bitcoin investment across every investor and likely, due to the type of person who buys a Tesla, many would have gotten in on it at some point anyway, but just not yet.
The author of the article doesn't seem to have considered the risk-seeking nature of investors and especially, those who are so in the black on their investment, light can't escape. The majority of large investors into Tesla would have backed the move and the risk, considering they have seen the value of their stock increase 1000% in the last year alone, meaning that they are well and truly up on the stock and are likely quite eager to diversify into some higher-risk investments, especially when Elon Musk is able to use his considerable influence to bring attention to them, even if it is indirectly through the announcement by Tesla of buying Bitcoin, something it was obligated to do by law.
So now, all Tesla shareholders have a little slice of their overall investment value (about 0.2%) tied to the fortunes of Bitcoin. That is 0.2 percent - not 2 percent, as the value of Tesla currently is about 650 billion worth. Percentage wise, that is not much exposure and far less than their exposure to the inflation rate of fiat currencies dictated by the governments and banks. As said, Tesla have done them a favor and take some of the cash and converted it into an asset that can be used in multiple ways to earn more. I wonder if Tesla will put any of it into a mining pool or perhaps use it to underpin a stable coin?
None of these considerations are mentioned of course, it is just an article written by someone who is trying to manipulate their audience away from Bitcoin, even though they do not have much of an understanding about it as an investment at all, nor about the growing way it and other tokenization paths can be used.
But, I think my largest gripe about the article is in the clickbait title itself, with the "stand to make" as he admits he has not Bitcoin. Investing into anything is always active, meaning that a deposit of some kind has to be moved into the investment vehicle, either directly like an individual buying, or indirectly like a company buying on the behalf of shareholders, as Tesla did. What the title suggests is that a person can do nothing and make money without investing anything, because someone else loses money on something they invested into.
If there are two people and one plants an apple seed and the tree doesn't bear fruit, the other person doesn't gain apples.
And in my opinion, this is the failure of society in so many areas, they are scared of risk, scared of failure, scared to invest into something that doesn't bear fruit - and they take pleasure in the failure of those who do try and make a positive difference in some way. It is interesting when there are so many articles driven by these same kinds of outlets in their lifestyle and wellbeing sections about, "being the change" - yet when it comes to economic change, they are heavy, heavy supporters of maintaining the status quo. They aren't protecting their audience, they are protecting themselves.
For many who do think about bias in communication, this might be obvious, but the average person reading from the average news service, doesn't actually spend that much time thinking about any of this, especially when it is in areas they do not have strong knowledge of, like the economy and investing. They read the contents of the article and have zero visibility on what is relevant to consider, but omitted in order to support the story narrative.
Bitcoin and crypto have their drawbacks and limitation, but they are constantly being reduced through innovation and development, with the more people taking part, the more likely they will not only solve issues, but flourish into an economy that is far more healthy for our society, than the centralized versions that have been used to exclude the majority from benefiting enough, that we can buy our way out of indentured servitude - after all, they need economic slaves to keep those machines rolling.
One thing I have learned about value is, it is valued more when it is earned and owned. People will work harder for their own company than that of another - but it requires having skin in the game. Exposing skin comes with risk.
As does trying to hold onto the past.
Taraz
[ Gen1: Hive ]
