Tesla investment in Bitcoin: Institutions have divided opinions

Elon Musk is either the hero or the villain of the year after Tesla split the minds of institutional investors with his Bitcoin purchase.

Not all analysts are convinced that Tesla’s recent $ 1.5 billion Bitcoin ( BTC ) purchase will be as beneficial to the tech giant as it was to the BTC price

The head of equity strategy at Saxo Bank Peter Garnry wrote in a press release that Elon Musk Tesla and his investors a „huge risk“ have exposed how Reuters on February 11 reported .

„Elon Musk exposed Tesla to an immense mark-to-market risk,“ said Garnry. He added that investor concerns would center on assessing the value of Bitcoin over the long term, given the intense market volatility since its inception.

The former Goldman Sachs manager Gary Black has on Twitter on February 8, wrote that he had closed his positions in Tesla Inc. ($ TSLA) and established inter alia with the „riskier capital allocation“ of the company.

Bitcoin’s value rose 20 percent in the 24 hours after Tesla’s investment became known , triggering another surge in the cryptocurrency market

Bitcoin, Ether ( ETH ) and many others hit new all-time highs as a result. In the meantime, the value of Tesla shares fell 7.5 percent over the course of the following trading days.

Brett Winton, head of research at ARK Invest, which allocated 8.75 percent of its portfolio to Tesla shares, also commented. He said the investment was „an appropriate use of cash,“ adding, „We are pleased with the way we forecast the positions we are taking to our clients.“

Grayscale CEO Michael Sonnenshein recently hinted that Elon Musk’s public support for Bitcoin would spark a „race“ for investment among institutional buyers and other tech „visionaries“. Sonnenshein said that Grayscale with its BTC trust also saw stronger inflows in 2021 than in the record year 2020.