What are the two most volatile investments ever? Tesla and bitcoin. Out of all the investments you
could ever make, there are literally no other investments that are as volatile as these 2.
Bitcoin just a year ago used to cost less than 10K and now worth over 50K. And since the beginning of
the year, the price has doubled. But what happens if these two
super volatile assets merge? That sounds like a recipe for disaster, but
that's exactly what happened in the last few days. Elon Musk announced that you can now buy a Tesla
with bitcoins. You don't have to convert your bitcoins to US Dollars
to buy a Tesla. Just send your bitcoins to Elon Musk's pocket directly and get your Tesla.
This is insane! An asset that you use to worth
4K less two years ago now can get you a brand new Tesla. I can't believe that something like this
is actually happening. These are the times when you feel like you should have spent every penny
you had to buy bitcoins. But I think we are late to the party unless you believe that bitcoin is
going to cross $100K or a million-dollar like some people claim. But you know what's more important
than that? Is hitting that like button. That's the best way to let me know that you enjoy our videos.
Imagine the people who use to mine bitcoins every day back when bitcoin wasn't a thing.
Back when you could mine multiple bitcoins a day. One hour of mining bitcoin in 2012 now
can get you a brand new Tesla in 2021. if 2020 was hilarious, then 2021 is going to be much more fun.
Crypto guys are having their best year ever, but that doesn't mean that the next year isn't going
to be better. Only time will tell. For those who are interested in bitcoins, we made an entire
video bout how to buy bitcoins, how to store bitcoins, how to make sure your bitcoins are safe.
The link will be in the description. But what's more insane than that is,
Tesla's bitcoin investment reportedly made more profit this year than car sales in the
whole of 2020. tesla is an auto manufacturer. You assume that their primary source of income
is probably selling cars, but apparently, it's not. Even if you argue that it's a tech company,
you still wouldn't think that its major source of income is bitcoin.
I am not trying to downplay Tesla or be negative about it, but I find that pretty hilarious.
Tesla disclosed in an SEC filing on Feb 8 that it purchased $1.5 billion of bitcoin.
If its holding has remained the same size, it will reportedly have made a $930 million profit.
That's almost 30% more than the company made from car sales in 2020,
If
bitcoin keeps growing at this rate, then Tesla will soon become a Crypto company.
He is giving bitcoin a lot of legitimacy because if such a huge company is investing in bitcoin
and accepting it as a form of currency, that could push a lot of other companies to follow
in teslas footsteps. It's still early to make any predictions because the market is still unstable,
and we will have to wait and see what happens when the economy stabilizes, what will happen
to bitcoin and Tesla when the fed will raise interest rates to at least one or even 2 percent.
But that's not what I want to talk about in this video, but rather about Cathie Woods's new Tesla
target price, which is 3000 USD.
She thinks that Tesla is going to cross 3000 Dollars by 2025. just a little context,
last year, before Tesla's stock split, ARK investment estimated that in 2024
Tesla's share price would hit $7,000 per share or $1,400 adjusted for its five for one stock split.
If you treat Tesla as an auto manufacturer, then this valuation will never make sense. However, ark
invest is looking at Tesla as a future tech giant that's taking a completely different approach,
and it has the potential to change the world. We are still a fossil fuel society,
so if Tesla would become the major player to transition the world into sustainable energy,
it will be worth far more than 3 trillion dollars, which will justify its 3K dollar stock price.
Last year Tesla produced around half a million cars. By 2025, Cathie woods believe that number
will grow to 10 million cars at best case scenario to finally match industries leader
Toyota, which sold almost 10 million cars globally despite the pandemic. In the worst-case scenario,
it will produce 5 million. That sounds realistic. But we can't compare Tesla to traditional
automakers because they are in a comply different business, and I am going to explain why.
Tesla's main business isn't cars but batteries and data. Think of Tesla as an energy company
because eventually, what they are doing is creating a pretty similar product with a
giant battery that you can recharge at any of its superchargers across the country.
Today's energy giants are Exxon Mobile, Shell, Chevron, and they are valued at over 200 billion
dollars each, although they don't have much future. First of all, oil is a finite resource.
Secondly, as the world moves to renewable energy, these companies are going to shrink, of course,
oil isn't going to go anywhere anytime soon, but its usage will diminish greatly. Theoretically,
Tesla has the potential to take over their entire market in the next two decades,
but that's just a small part of it because if you take a look at the world's largest oil company
Saudi Aramco. It's valued at 2 trillion dollars which tells you how big this market is,
and every oil country has its own local company that controls a certain chunk of the market and
is valued at dozens of billions of dollars, if not hundreds. The problem with teslas competitors is
that they got into the game too late, and Tesla is so far ahead in this game that it's impossible for
any company to catch it any time soon. When Tesla announced that it's going
to build a Gigafactory, it was unclear whether it was the right decision or not,
but it seems like Gigafactory is Tesla's strategy to transition the world to sustainable energy.
Instead of reinventing the wheel every single time, they just built a factory that efficiently
builds cars, battery packs, energy storage products, Powerwall, and all that is left for it
is to build as many Gigafactories as possible. The company has become so efficient that they
built their china Gigafactory in around a year, then in the middle of a pandemic, Tesla announced
that it's going to build its next Gigafactory in Berlin, which is set to open in July this year.
At this speed, it's pretty easy to imagine that within the next 5 or 7 years, the company will
build a dozen Gigafactories and will meet Cathie Woods's prediction of 10 million cars a year.
Ark Invest also bets on Tesla's autonomous technology. Remember when Elon Musk said,
your Tesla could be earning you money when you are not using it because it will drive
people around like an uber. It sounds a bit futuristic, but theoretically,
it's possible, and eventually, that's where the industry is headed to. So by 2025,
the company should have reached level 5 autonomy which sounds reasonable but not practical since
the industry is over-regulated and since Cathie Woods predicts that ride-hail would account for
the majority of Tesla's enterprise value in 2025, it makes her prediction a little over optimistic.
I don't doubt Elon Musk, but I think that's going to take a little longer.
Nevertheless, if you are playing it long-term, then you shouldn't care.
If you want to learn more about Tesla, then check out my video on our second channel,
which link I will leave in the description. There are a few other things I wanted to talk
about, such as how the price of your coffee could skyrocket because, unfortunately, a ship,
a containership, is stuck in the Suez Canal and is stopping the rest of the ships from crossing
the route which could cut the supply chain and cause a shortage of coffee in the market.
We complain about a 5 dollar coffee. Now we might start having 20 or 30 dollar coffees, who knows!
Well, we might talk about that in a future video. Meanwhile, if you want to know where the stock
market is headed to, I made an entire video about that a few days ago, so make sure to check it out
but most importantly, give this video a thumbs up as usual and subscribe if you are new around here.
Thanks for watching and I will see you in the next one.