Prior to hitting what turned out to be a short-term bottom, however, Tesla CEO, Elon Musk sent forth a tweet, simply asking, "What does the future hodl?" which caught the attention of more than a few investors and acolytes, being that Musk is a Bitcoin believer, having committed $1.5 billion of his company's funds to the currency. "Hodl", a discrete misspelling by Musk in his tweet, is a commonly-used acronym popular among Bitcoin devotees, meaning “Hold On for Dear Life.” Thus, people who own and keep Bitcoin are known as hodlers.
Whether Musk was the actual catalyst, the price of Bitcoin began hurtling forward at a rapid pace Sunday evening, catapulting beyond $52,000 by midnight. But, that was only the beginning, because on Monday morning, none other than world-class Bitcoin basher, Jamie Dimon, CEO of JP Morgan Chase, announced that his bank would begin offering investments in Bitcoin to its wealthiest clients via an actively-traded fund by partnering with institutional investor NYDIG.
For JP Morgan's investment arm, the goal will be to offer high net worth individuals and institutions exposure to the world of cryptocurrencies without them actually having to own or acquire any of it. Dimon's early Monday morning missive sent Bitcoin higher still. By midday, it had climbed back over $54,000 and as of Tuesday morning has cruised past $55,000, considered by a score of Bitcoin analysts to be a critical pivot point.
Those who had - for the 489th time - decried Bitcoin's demise, seem presently to have been wrong again, as the cryptocurrency launched in 2009 continues to careen into the stratosphere. Did Musk know something about JP Morgan's imminent announcement when he tweeted or was he just lucky to get such favorable timing? We many never know, but his tweet and Dimon's announcement were certainly an opportune coincidence for anybody who BTFD (Bought the F***ing Dip).
Bitcoin followers note that on the way to "the moon", Bitcoin often experiences severe pullbacks such as this most recent one, but it's become well known that these instances of bearishness are common, normal, and healthy for the continued success of the crypto world. The instances of selloffs are usually short - lasting between seven and 15 days - and routinely severe, with declines of 15 to 30 percent. Weak hands get shaken out during these drawdowns, replaced by more serious, often institutional players who are less inclined to panic on short-term price volatility, giving Bitcoin a more solid base of support.
Where the price of Bitcoin will eventually head nobody really knows, but serious investors such as Max Keiser and Raoul Pal believe the price will eventually soar into six digits. For instance, Keiser has set a price target of $220,000 for "sometime in 2021." Other crypto champions offer similar predictions, many of them higher.
Also helping Bitcoin forge a path forward are comments made by legendary investor, Bill Miller, who spoke on CNBC last week, opining that Bitcoin isn't a bubble, and that this year's outstanding growth is a sign of it going mainstream and appealing to institutional investors. He points out that one of the main features of Bitcoin's rising price structure is simply a supply and demand issue. Bitcoin miners increase the stock by two percent a year, while demand for it is growing at a much faster pace, thus raising the price naturally.
Acceptance of Bitcoin by the institutional investor crowd, especially such high-profile statements by the likes of Miller, Musk and Dimon, ensures that the federal government will not crack down on cryptocurrencies as many have feared. Treasury Secretary Janet Yellen has commented repeatedly that Bitcoin and altcoins need to be regulated, but her office has not issued any new rules regarding cryptos. Any rules or restrictions Yellen may wish to put upon investors are being made much more difficult now that Wall Street is beating a hasty path to the crypto universe. The one thing she is certain NOT to do is upset the masters of the universe at the big banks and investment brokerages.
Elsewhere on Monday, stocks were mixed, with the Dow losing ground while the NASDAQ was playing catch-up to the rest of the major indices, joining the Dow, S&P, and NYSE Composite by setting a new closing all-time high at 14,138.78, surpassing the February 12 close of 14,095.47. The other indices have been setting records on a regular basis for the past few months, but now the averages are in lockstep, prompting the bulls to press forward.
Announcing after the closing bell, Tesla (TSLA) returned 93 cents in the first quarter, topping estimates of 79 cents per share on revenue of 10.39 billion. The stock fell in after-hours trading. As of Tuesday morning, shares were trending lower by just more than two percent. A decline in the share price of the electric car manufacturer would not be devastating to anyone who's been on the Tesla train for a while. The stock has been one of the best performers in the market since the start of the plandemic back in February 2020.
In March of 2020, the price of TSLA shares fell into double digits, bottoming out around $85. It has since skyrocketed as high as 883, a ten-bagger for bottom feeders. It's since pulled back, as have most of the big cap tech stocks, but is still elevated above 700. It closed Monday at 738.20. Nobody's crying over another solid quarter at Tesla.
Many more companies are reporting first quarter earnings Tuesday and the rest of the week. The Fed begins a FOMC meeting on Tuesday with a policy statement due out at 2:00 pm ET Wednesday.
AT THE CLOSE, MONDAY, APRIL 26,2021:
Dow: 33,981.57, -61.93 (-0.18%)
NASDAQ: 14,138.78, +121.98 (+0.87%)
S&P 500: 4,187.62, +7.45 (+0.18%)
NYSE: 16,241.21, +35.21 (+0.22%)
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