The purpose of this paper is to analyze the impact of the US macroeconomic environment in the value of Tesla's treasury as well as to study the pros and cons of an alternative way to store value based on the acquisition of bitcoin, a cryptocurrency which is expected to increase its value in the near future. In a context in which factors such as an increasing cost of capital and currency risk may decrease the value of treasury if cash is maintained static, companies are seeking alternative ways to ...
The purpose of this paper is to analyze the impact of the US macroeconomic environment in the value of Tesla's treasury as well as to study the pros and cons of an alternative way to store value based on the acquisition of bitcoin, a cryptocurrency which is expected to increase its value in the near future. In a context in which factors such as an increasing cost of capital and currency risk may decrease the value of treasury if cash is maintained static, companies are seeking alternative ways to maintain or even increase the value of their treasury without losing liquidity. Bitcoin is gaining importance in society and several finance experts are debating on the possibility that bitcoin will become the new way to store value known as the digital gold.
Companies such as Tesla have already acquired some bitcoin in recent times. The paper will analyze the causes that have brought Tesla to take this action and how bitcoin might be able to solve many of the inconveniences of maintaining cash static in treasury. Moreover, it will assess the impact of an earlier acquisition of bitcoin in the current Tesla’s financials. It will also be studied the expected future for the bitcoin market and which is therefore the predicted gain on acquiring bitcoin versus maintaining cash static.
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