Market X-Ray: On-chain data surrounding Tesla's $1.5b Bitcoin purchase
Hi Frens — Cole here… I’m going to be handling today’s market x-ray solo as Joseph is preparing for a presentation.
I’m going to mainly focus on on-chain data surrounding Tesla’s acquisition of 10-figures worth of Bitcoin as it is arguably one of the most significant (technical and fundamental) developments that the crypto has seen since the genesis block was first mined over a decade ago.
Ah, and the obligatory shill: if you want access to the exclusive interviews with top traders and industry executives, our research about DeFi and crypto trends, and the additional DeFi letter, you will need to subscribe. But have no fear, it’s only $14.99 a month, or $139.99 a year. Get yourself a belated holiday present and subscribe to Alpha Alarm today.
It’s literally the cost of one Uniswap trade a month or a few Starbucks coffees - it’s cheap.
We’re going to release an exclusive interview with a leading Bitcoin on-chain analyst this upcoming week. You don’t want to miss out on this interview.
Unless you’ve been living in a cave, held up in some remote compound without internet access, or on a digital detox (in which case you won’t be reading this lol) you’ve probably been closely following development surrounding Tesla’s acquisition of $1.5 billion worth of Bitcoin.
Elon Musk hasn’t been shy about his interest in cryptocurrency, with the world’s wealthiest man frequently making Dogecoin-related jokes while briefly adding “#Bitcoin” to his Twitter bio.
Despite this boisterous interest, until today he never signaled any intentions to actually loop the cryptocurrency into any of his businesses.
Today, however, a filing with the Securities and Exchange Commission indelibly solidified his belief in BTC’s future, with Tesla allocating roughly 10% of its balance sheet — a whopping $1.5 billion — to the benchmark digital asset.
Furthermore, the auto manufacturer also announced plans to adopt Bitcoin as an accepted payment method for its vehicles — an option that will undoubtedly grow in popularity as a new wave of Bitcoin millionaires is minted.
The significance of this development for the crypto’s future cannot be understated. Not only does it further legitimize the asset as something that can, and should, be held on corporate balance sheets as an inflation hedge, but it will also introduce a new wave of starry-eyed retail investors who will help drive mainstream adoption.
As one Twitter user noted, news of Tesla’s big purchase reverberated far beyond the narrow confines of “Crypto Twitter,” with basically every major news outlet running headlines on the topic.
So, When Did Tesla Buy Its BTC?
On-chain data may offer us a glimpse into where, when, and how Tesla acquired its massive Bitcoin stake.
Ki Young Ju, the CEO of analytics firm CryptoQuant, explained in a recent tweet that the $1.5 billion used to purchase the orange coin likely equated to 39,000 BTC, assuming that it was purchased at an average price of $39,000.
Knowing that there’s a high likelihood they purchased BTC at this price, it becomes a very likely possibility that Tesla was the source behind the 30k BTC outflows from Coinbase in late-January and early-February.
“$1.5 Billion ≈ 38k BTC (assuming the price was 39k) Speculative guess but I think 30k BTC Coinbase outflows went to Tesla.”
Judging from the market’s intense reaction to this news, this is an overtly bullish occurrence that will likely alter the trajectory of Bitcoin’s mid-term growth. It may also hold a flame under other corporations that were considering taking similar actions, thus forcing more large companies to add BTC to their balance sheets.
Joseph Young is a cryptocurrency analyst who has been in the space since 2014. He contributes to Forbes, CoinTelegraph, and a host of other top crypto news sites. Over his 6+ years in the space, he has built countless connections with industry leaders and has amassed over 120,000 followers on Twitter.
Nick Chong is a passionate crypto researcher who specializes in identifying and extracting conclusions from trends within the rapidly emerging DeFi-space. He has been involved in the crypto markets since 2016, and sources deals for Parafi.
Cole Petersen first learned about Bitcoin in 2013 and began working in the space in 2017. While on a gap year as a student at the University of California, Irvine, he now leads LINKPAD, a venture capital fund, and previously worked as an associate at BlockVenture.
Pepe of the Day:
Pepe the Frog has become the unofficial mascot of the crypto markets, so we feel it is only fitting to add a “Pepe of the Day” section highlighting only the finest and rarest Pepes.
Today’s featured Pepe: “Bears stay mad. Bears stay poor.”