Receiving Wide Coverage ...
Buying bitcoin
Tesla said Monday it bought $1.5 billion in bitcoin and “also said it expects to start accepting bitcoin as payment for its products soon,” the Wall Street Journal reported.
The electric car maker said the move aims to provide “flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.”
The announcement “gave bitcoin its most significant corporate endorsement” and “added another boost to its dizzying rise,” the Financial Times said. “Bitcoin climbed more than 10% to a record high of $44,100, extending its 50% surge so far this year.” The investment “represents 11% of the company’s cash.”
Tesla said its plan to accept payments in cryptocurrency would be “initially on a limited basis.”
“The move is a major sign of support for bitcoin and could encourage other major companies to follow suit in accepting the world’s most popular cryptocurrency,” the Washington Post said. “An HSB survey published in 2020 found that 36% of small and midsize American businesses accept cryptocurrency. Tesla will join big names such as Microsoft, Wikipedia and PayPal in accepting bitcoin worldwide.”
Dan Ives, managing director of equity research at Wedbush Securities, “called Tesla’s embrace of bitcoin a potentially ‘game-changing move.’ Ultimately, investors and other industry watchers will be watching this closely to see if other corporations follow the lead of Tesla on this crypto path,” he said.
“Other companies, including the payments processor Square and the business intelligence software provider MicroStrategy, have publicly said they were investing corporate cash in Bitcoin. Tesla is perhaps the most prominent company to do so,” the New York Times said.
“Other digital currencies also rose sharply in value” on Monday, the Times added. “The rally is a moment of euphoria for the thousands of different versions of digital money, which years ago were dismissed as little more than online Beanie Babies caught in a speculative bubble. While cryptocurrencies often rise and fall together, the latest surge stands out for its magnitude — for the first time, the value of all cryptocurrencies skyrocketed above $1 trillion over the last month — as well as the number of people who are using the digital tokens for practical purposes and the major players who are getting involved.”
Wall Street Journal
Which way will he go?
President Biden’s choice to head the Office of the Comptroller “is highlighting fault lines among Democrats—on issues from racial diversity to ties to the Obama administration. Michael Barr, an Obama and Clinton administration alumnus who leads the University of Michigan’s public policy school, is the leading contender” for the job. “But some progressive Democrats are making a last-ditch effort to install Mehrsa Baradaran, an Iranian-born law professor at the University of California, Irvine and author of ‘The Color of Money: Black Banks and the Racial Wealth Gap.’”
“Their records suggest that Mr. Barr and Ms. Baradaran are likely to pursue racial equity and expand financial services in low-income communities. Several progressives, including Ohio Sen. Sherrod Brown, have lined up to support Ms. Baradaran, while others back Mr. Barr. Mr. Brown chairs the Senate Banking Committee, which will have to green-light the eventual nominee.”
Whoever it is, he or she “is widely expected to invalidate the GOP-backed measure that bars banks from shunning gun makers, fossil-fuel producers and the like,” American Banker reports. “But another option is to recast it to promote investment in underserved communities.”
The end is nigh
Mortgage forbearance programs, which “have been a financial lifeline for many Americans navigating the pandemic-ravaged economy, are set to expire in the coming months, a serious challenge for borrowers who are still out of work or are earning less than they did pre-pandemic. More than half of 2.7 million active forbearance plans are set to end for good in March, April, May or June.”
Yield surge
The yield on the 30-year U.S. Treasury bond “pushed past 2% Monday for the first time since February 2020, before the coronavirus pandemic roiled government-debt markets.”
“The move comes amid a recent surge in yields of longer-term Treasury bonds compared with short-term debt, as traders bet that government stimulus will accelerate a rebound in economic growth. That bodes well for corporations, consumers and the banks that lend to them but poorly for investors who buy Treasury bonds in the near term.”
Elsewhere
Freezer burn
The Inter-Parliamentary Alliance on China, “a group of legislators from countries including Britain, Australia, Japan and the United States,” is calling on HSBC Chairman Mark Tucker “to unfreeze Hong Kong pro-democracy activist Ted Hui’s accounts,” Reuters reports.
“The bank said it had no choice but to comply with specific legal instruction by police authorities in Hong Kong to freeze the accounts of somebody under formal investigation.”
Quotable
“It’s just a sea change in sentiment. We went from being mocked and ridiculed to having the richest man in the world talking about it.” — Meltem Demirors, chief strategy officer at CoinShares, on Tesla CEO Elon Musk’s decision to buy $1.5 billion of bitcoin, boosting its price.
