Last night Elon Musk of Tesla fame ploughed $USD 1.5 billion into Bitcoin. This sent the premier crypto currency into record territory of around $AUD 57,000 per coin.
It's a low risk bet for the tech guru. Dollars are being devalued on a daily basis and gaining a big stake in a finite crypto currency provides a relative store of value. The fact that Bitcoin jumped on the news also provides him a handy instant paper profit.
I suspect Tesla won't be the last company to park some of their treasury in Bitcoin. It just makes sense, especially as it is now being seen as a genuine asset class.
There are stories this morning about Apple being the next mover and it is hard to argue with the logic.
Firstly, $1 billion only represents four days cash flow and a fraction of their cash reserves. The RBC Bank is suggesting an Apple investment could be as high as $5 billion. In effect, creating its own crypto currency exchange.
This would be a game changer for both Apple and Bitcoin.
An investment of that magnitude by a company of Apple's status could see Bitcoin close in on a $100,000 price. A move like that would effectively have Apple's investment pay for itself.
More importantly, Apple has 1.5 billion customers who would have easy access to the crypto infrastructure, prompting more people to enter into the space. Apple made its business by making previously complex things simple for the rest of us.
They could do the same with crypto currency investment and that would change the game completely.
Cory Bernardi is the author of seven books and has been a member of the Australian rowing team, a publican, an investment portfolio manager and spent nearly 14 years as an Australian Senator.
