Tesla reported better-than-expected earnings per share after the market closes and even boosted its profit by selling Bitcoin.
Bitcoin faces risks as traders lose faith in Tether
- Elon Musk tweeted that the BTC and the ETH are too high.
- JPMorgan claimed that the loss of confidence in Tether put bitcoin at risk to fall in the short term.
- JPMorgan still set its long-term target for Bitcoin at $146 000.
Tether & Bitcoin
According to JPMorgan, the BTC market may experience liquidity shock if traders lose faith in Tether (USDT). What is Tether? It is a stablecoin that is used in transactions to move between cryptocurrencies and fiat money. Tether’s value is linked to the USD on a 1:1 basis. Besides, in comparison to other cryptos such as the BTC that are “mined,” Tether is created on customer orders. As a result, some doubts appeared that Tether was used to increase the value of Bitcoin. According to JPMorgan, nearly 50%-60% of Bitcoin traded for USDT since 2019. Therefore, the loss of confidence in Tether may cause a fall in bitcoin’s value.
Indeed, there are some risks for Bitcoin in the short term, and the largest one is Tether. However, these risks are still low as cryptocurrencies are rising no matter what with major banks and big companies entering the crypto market. Elsewhere, in the last decade, crypto markets have yielded higher returns than most traditional investments. Finally, after presenting some risks for the crypto market, JPMorgan still claimed that its long-term target for Bitcoin is $146 000.
Gold & Bitcoin
“Bitcoin’s competition with gold as an “alternative currency” will likely continue as millennials become a more important component of investors’ universe and given their preference for ‘digital gold’ over traditional gold,” said JPMorgan.
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Elon Musk, Tesla’s founder and CEO, said the company wouldn’t accept Bitcoin as payment any longer. As a result, BTC/USD dropped to $45,300, the low unseen since March.
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