Analysts from Bloomberg have found that Tesla Inc’s (NASDAQ:TSLA) allocation towards Bitcoin may have been an inflection point in favor of the leading cryptocurrency.
What Happened: “The rule of money flowing to where it’s treated best appears to be an enduring tailwind for Bitcoin. If one of the most significant members of the S&P 500 keeps sinking, we see underpinnings improving for the potential global digital store-of-value,” said Mike McGlone, a senior commodity strategist in Bloomberg’s Crypto Outlook report for the month of April.
McGlone’s statements referred to a chart depicting the price of Tesla dropping by 25% since its Bitcoin allocation announcement on March 25, while the price of Bitcoin grew 35% during the same period.
According to Bloomberg, the digital asset’s upward price trajectory has also had positive implications for the Grayscale Bitcoin Trust (OTCMKTS: GBTC) – the largest Bitcoin fund that has uncharacteristically traded at a significant discount to its net asset value for the past month.
Why It Matters: “Grayscale Bitcoin Trust is gaining the upper hand over Tesla,” states the Bloomberg report.
“Bullish underpinnings for the Grayscale Bitcoin Trust (GBTC) are gaining legs, we believe, as it outpaced Tesla by almost 50% this year.”
The report finds that declines in GBTC towards its 50-day moving average have been enticing to responsive buyers who can make up for the “extra discount” if GBTC converts to an exchange-traded fund.
According to a recent statement from Grayscale Investments, the fund is 100% committed to converting GBTC into an ETF.
“The continued outperformance of Bitcoin vs. Tesla is a key narrative that we expect for 2021,” concluded the Bloomberg analysts.