Tesla has stated in its latest annual report that the company has updated its investment policy to now include Bitcoin, gold, and “other assets” as possible investments. While this move may move the price of Bitcoin, it would have limited direct effect on gold prices, said Alex Mashinsky, CEO of Celsius Network.
Can Tesla buy gold and Bitcoin. Now, what is the next big asset? That's going to outperform everything in 2021. What is Alex? Mashinsky his next Bitcoin price forecast. We're going to go through all these topics. Alex, you are the CEO of Celsius network. You have just been named by a Massari as the top.
Performing asset of 2020. Let that sink in Celsius. Token beats chain link. Ethereum. Carday no Bitcoin Monero. LycoRed I can go down this list. We'll look at this chart, but congratulations, Alex. And welcome back to the show. Thank you, David, you look sharp as always. And thanks for having me. Well, my, my, my, my looks are secondary to the fact that you outperformed everything right.
We're going to be talking about how you managed to get a 3500% return over 2020. So we're going to touch on that. But first I want to address the big statement coming out of Tessa for this week. They are updating their investment policy. I'm just going to read their statement that was filed. With the sec.
So it says in January, 2021, we update our investment policy to provide us with more flexibility, to further diversify and maximize returns. And then it says here, we invested an aggregate of 1.5 billion in Bitcoin under this policy. And now they may invest a portion of such cash in certain alternative reserve assets, including digital assets, gold bullion.
Gold exchange, traded funds and other assets. So we already know they put money in Bitcoin. That's not news, but the question now is can they now buy gold ETFs and gold bullion? Would that be within the realm of possibility for Elon Musk to do? Yeah. And so it's a great question. Look, uh, Elon is a Maverick and obviously he's one of the best CEOs in the world, uh, that is worth more than.
And all the car companies put together, all the other car companies put together, but they actually don't have that much cash. And obviously they recently raised a lot of cash from investors. So I think it was prudent on them to amend their registration with the sec and then form all of their investors that are going to be basically not putting the cash with JP Morgan, but rather putting it in, uh, in Bitcoin.
Right. So I think, uh, uh, Elon Musk following. Um, a micro strategy and a lot of other companies AE is deciding that the smartest guys in the world and the richest guys in the world are all deciding that her holding dollars is not the future and that they need and non-correlated asset. And the two best non-correlated asset as me and you have been talking about for the last several years is gold and Bitcoin Bitcoin is scarcity, and that's why it moves a lot.
Gold has a much more abundancy and that's why it doesn't move as much. Even when you make these announcements, first of all, is it normal for a tech company to take their cash reserves and place it in gold or Bitcoin? Has that been happening? So normally, uh, investors, I ran a public company before I started Celsius.
So the NASDAQ and my investment, my investor with punished me very heavily. If I took the cash of the company and put it into some other assets, they want to see you reinvest in your company. They want to see you, uh, uh, accelerate the growth in the company, but using Bitcoin or gold as treasury management is something different.
So, so I don't see any issue with, uh, replacing again, the traditional Wells Fargo or JP Morgan treasury men management with. Uh, using Bitcoin org or gold. Why gold and Bitcoin? Why not? Treasury bills? Why not? Um, CDs. Why not fixed income products? So when the yield on those products used to be five or 6%, it made a lot of sense.
But when they field is so low, you're actually taking much more risk than there ward that you are given. So that's like picking up a pen in front of a steamroller, right? What the reward you get, the risk reward is just not there. So today, uh, crypto or Bitcoin, more specifically, it represents a much better risk reward.
And again, the smartest people in the world and the richest, people in the world are siding with that as, as their investment or their choice. Why did Tesla a tech giant or an auto manufacturer, whatever category you want to put them in decide to open the doors to gold in particular? What, what, what is a signal for the gold market, Alex?
Right. So it's, it's almost like what, they're not telling you. What they're not telling you is that they don't trust the U S dollar. They saying by voting for Bitcoin and putting gold as a reference, they're basically saying we do not want our treasury to be held in us dollars because we expect high inflation.
We expect the basement. We expect. Everything besides good news about the U dollar. I think the key for me at least is that they're putting Bitcoin and gold in the same category. Like you said, they don't trust a dollar. What can we buy that can hedge against a dollar? Well, it's gold and Bitcoin. So they're putting that together in the same camp.
And we're finally seeing institutional, not just from the financial institutions, but industrial institutions like Tesla, except this notion that gold and Bitcoin are similar in utility. Do you agree with that? Well, I've been, I think every time I've been on your show, I'd be saying exactly the same thing.
Yeah. It's good to see that other smart minds are, are, uh, finally reaching to the same conclusion. Again, if you're the CEO of a public company, it's much easier for Elon Musk to buy it on his own account. Uh, but convincing his board, convincing the investment community, that this is a good thing is definitely a much higher bar.
And, and you see, like, you have to look at crypto also from that perspective. 2017 that the heroes, the ambassadors for, uh, for Bitcoin and Ethereum, where, uh, uh, people who were not really at the top of the echelon of the business world today, uh, some of the best, most famous people in the world are the champions for Bitcoin, Ethereum and so on.
So because of that, you're seeing this massive migration or acceptance, uh, of, uh, these assets as alternative alternatives. Uh, to the traditional, uh, asset management. I'm just curious to how he's going to execute. If he does buy gold, how he would execute that strategy with gold bars, gold bullion, ETFs, what are what's?
So gold is a very established asset. There's plenty of, uh, and you know, ETFs and other or physical storage facilities that you can buy that actually have very low cost basis. And remember the Bitcoin, uh, Uh, the largest asset, we are the second largest asset. The largest asset holder of Bitcoin is gray scale.
And that costs you 2% a year to hold. So it's probably four or five times more expensive than actually holding gold. And it was with Celsius as an example, you actually earn 6%. So we are plus six while most of our competitors are minus. Right. Okay. Now, uh, I, when they made this statement, Recently, like yesterday were two days ago.
They, the Bitcoin market moved up substantially in response. Well, I don't know if that was the sole reason that moved up, but certainly it did have an impact. It made the news, it was on Twitter. It was on social media. Gold had no reaction whatsoever. So I wonder why that is. So again, it goes to scarcity.
So I think, uh, Elan announced that he, uh, either already bought or he's planning to buy. And a billion and a half. So everybody tried to front run a Tesla's decision and hopefully get in on the asset before he buys the rest of his all location. Uh, w gold is, uh, is a acid that is 10 times larger than all of crypto put together.
It has much more liquidity. It has a very efficient and liquid futures market. So it moves much less. It's much less volatile than the crypto market. What you're seeing is $1.5 billion is significance for Bitcoin, but not so much for gold that's right. Is a significant for Tesla. How much of their cash reserves has put into this investment policy?
Do you know? So, I don't know their cash position, but I would be surprised if they had more than 10 billion in total and cash, because remember they have a huge market cap, but they actually don't have that much cows. They had to go back to the market several times and raise capital. So as a percentage of their treasury, that is a very large commitment.
It's definitely a much larger commitment. Excluding Michael seller will put a hundred percent of his treasury into, eh, you know, Um, uh, micro strategy, most of the companies are going to allocate five, 10, maybe 15%. And I think here, we're talking about the, you know, the higher limit, uh, as far as percentage of Tesla's total, uh, treasury.
Yeah. Let's talk about using Bitcoin as a form of payment for the Tesla vehicles. Uh, th I have a few questions about this. First of all, did this come as a shock to you? Not at all. Actually, I reached out to Tesla to partner with them. To allow any Bitcoin holder to take a loan and pay for it that, uh, to buy their Tesla with a loan from Celsius.
So we are, uh, we, we love the fact that they are also going to accept Bitcoin. And, um, and there are again, tens of thousands of storefronts on the internet that already accept Bitcoin using either Coinbase or some other solution. So that's not a surprise. I think the question is really, is Tesla going to keep the Bitcoin when they get paid in it or are they going to sell it into FIA?
That is the question we need to ask. First of all, why are they doing this? I mean, what, what, why, why do you need a second form of. Well of currency, so to speak. I mean, I could pay with us dollars, Chinese new Ang. If I'm in China, Euro, if I'm a year, why, why do I need Bitcoin now to pay with, uh, to, to pay for my cars?
You're right. I mean, look, there is no difference. And, and, uh, the Tesla team is very good at branding. The crypto community is a very loyal community. And if you can convince the crypto community to choose Tesla as their car, I see another 10 and a few million people. That are going to buy Tesla. So I think they're very, very good with it, Brenda.
Okay. So it's kind of a PR move. What, what, okay. What is a mechanism behind an actual purchase with, uh, with, with Bitcoin, say I have Bitcoin in a wallet. Um, what, what's next? Do I just call up Tesla and say, can you, can you, can I transfer this from my wall? How does that work? It's never been done on, on this kind of scale before, right?
I don't think any of the car makers have created these kinds of programs, but I'll just to give you an example. Um, almost basically any, uh, storefront you can create on the internet, right. That, uh, automatically comes with a Coinbase account or some other BitPay account or anything like that. So most, uh, most of the current online shopping experiences have that option and paying crypto that most people that use crypto to pay for anything.
Are sitting then and crying, right? Because they basically use their Bitcoin at 5,000 or 10,000 to 15,000. And here it is worth 45,000 or whatever the price is today. So, so if you bought a sofa, it costs you five times as much. If you bought a car, it costs you five times as much. Yeah. So our, our strategy is to, again, Hoggle your Bitcoin, take a loan in dollars and pay for your Tesla.
That's a strategy we don't. Recommend paying with your Bitcoin, because then you let go of your Bitcoin. What does this signal in terms of Teslas? I guess, outlook on Bitcoin's volatility, because let's say you can buy a car now with two Bitcoins sounds about right. You can buy a model West about two Bitcoins right now.
I mean, it must be frustrating if let's say the next day, the price drops to 0.5 Bitcoins. And then it goes up to three Bitcoins the following day. It must be frustrating for a merchant. So in a sense, aren't they signaling that. I think Bitcoin is mature enough to not be so volatile in the future. They're not.
And Bitcoin is definitely going to continue to be very, okay. Look, Bitcoin is not a good form of payment. Yeah. It's all like a form of payment, but they're still doing this. And the dollar is a horrible store of value. It continues to lose its value, but it's an excellent form of payment. So yes, we can switch the two.
We can use Bitcoin as a, as a form of payment, but that doesn't mean it's good at it. What about goal? It seems to do both right. Gold is a much more stable asset. It is, uh, it can be used as a form of payment. There are governments there, countries that settle their payments with gold all over the world.
And so it's definitely something much more stable, but I think, again, look, we, I don't expect Bitcoin to become a form of payment for several more years because it needs to stabilize at a certain price level. My view it's, it's got to stabilize above $200,000 and, and then you can start using it also as a form of payment today, $200,000.
Yeah, it's extremely volatile asset to use as a form. Yeah, that was my next question. You know what? Okay. I can buy a Tesla now with Bitcoin, but when am I going to be able to call up pizza hut and say, Hey look, uh, and the guy says to me, your, your order is 2295. Would you be paying that with cash credit or Bitcoin?
Can I hear that question in my lifetime? So look Celsius is a hotline community. Every anyone who invested with us with our strategy. Uh, was the best performer of all of 2020. Okay. So, so I I'm promising you that, uh, anyone who continues with the strategy will also be the best performer of 2021. You sell your Bitcoin, you use your Bitcoin for any purposes, you exchange it for any goods or service.
You will be sorry for that. That's all I have to say. You won't be sorry for that. Okay. I'm going to coach you on that one. Um, why can you elaborate? Why would you be sorry, because they're the scary look. We're seeing the avalanche of new retail and corporate and institutional customers coming in. Our, our corporate applications are up 10 times, not 10%, 10 times since November.
Okay. So 10 times as many companies that are reaching out and saying, please open a corporate account, I'm want to buy some Bitcoin. I want to deposit Bitcoin with you because I wanted to earn interest. So when you see that avalanche of demand, both from retail, from corporate and institutional, You know that the price is going higher.
It's a supply demand issue. The amount of Bitcoin being created is fixed. The inflation of Bitcoin is 3% a year because I don't think, I don't think that tells a fans. They're going to listen to you though. I think they're still going to take your two Bitcoins and buy a model. S what would you say to them?
W we, we can give them a 1% loan. They can borrow money from us at 1% per year. And use that money to buy Tesla. And within a year or two, the amount of Bitcoin they have left will pay for the Tesla that they already know. All right, let's get right down to it. And then we'll move onto your price forecast.
Should Elon Musk buy either gold ETFs or even more Bitcoin under his new investment policy, what's going to happen to the market price. Would that start a chain reaction of buying for both gold and Bitcoin? So micro strategy is a great leading indicator. Uh, it's up more than Bitcoin, uh, for the last year.
Uh, so what, what that steps, stock performance it tells you is that the companies that accumulate the asset, not the trade in it, not the ones that use the asset and then sell it. The ones who accumulated the asset like micro strategy wall street is giving them a premium. Uh, G uh, gray scale is trading at a premium micro strategy is trading at a premium, most new companies that are listed or have changed.
The business model to focus on Bitcoin are trading at a premium. So I think you're going to see more and more wall street firms decide to accumulate the asset. That's what I was saying. What we have to watch very carefully is Tesla going to accumulate the Bitcoins? If they do, then they will start getting a premium.
Uh, for that accumulation. What about for gold in the same market impact happened for gold? So look, I think gold will start moving. I think we need to see more pressure on the dollars. Continued pressure on the dollar for gold to start moving. And we haven't seen that yet. Gold is down 10% on a stabilized and we have to see if it's just a, is it, uh, are we seeing a bottom here and is going to bounce back up?
Or are we going to see it going further down? So, so when we see that we will understand, we'll be able to be much smarter about where gold is going from here, but I think many corporates are buying, uh, you know, the GLD or any of the other, uh, uh, ETFs. That's the easiest way to own gold. And the scarcity of gold has not yet come to, to light, does not come to the market.
So you need a much bigger move in the dollar to start seeing the price of gold. So bottom line gold price action needs macro factors, not Elon Musk. It's not enough. Elon Musk announcing gold. I'm buying gold is not enough. Yeah. Okay. That makes sense. Finally. Now the moment of truth, what's your Bitcoin forecast?
Well, before we get into that, you were right. I'm going to, I'm just going to point it out. You were right for 20, 21, 2020. The price exceeded your forecast and you also call for a pullback in 2021. So it, it pulled back to not quite as low as you had said. I think you were being a little too conservative. I felt that, but you did, you, you were right and move downward.
That was the same direction. Now it's climbing back. It's reached new all time, highest today as we speak. What's next, Alex? Yeah. So, so I, I, when Bitcoin was over 40,000, I said, it's going to go down and below. 20 a 30,000. I thought it was going to go down to 24 to 26. It hit 29 and then Elon Musk changed his header, uh, uh, to be Bitcoin.
He just changed everything about himself to just say the word Bitcoin. So, so if we, if I had few more days, I would probably hit my target anyway, but I think, look, I think we're going to hit a high of about 160,000. Before retrenchment. And I'm talking about this year, so we're going to see a major bull run and to those levels again, Fibonacci support is like there's one level at 85,000.
There's another level at just below a hundred thousand and then 160,000. So, uh, so I think we will, uh, hit those levels. But then we're going to see a rich management as you're going to see all the people following in and also selling their coin. So I think we're going to close the year below a hundred thousand.
Okay. I'm just digesting that call. Uh, let me follow up with you and see what, uh, first of all, what are you basing that on? Can you walk us through the analysis? Right. So again, we know we know what the supplies is and what we don't know is how many sellers are at every level. So what, when we hit that level of 41,000, a few weeks back, uh, the sellers where the mining companies, the people who mined Bitcoin dumped all their coins.
And there was also some hedging by institution, meaning selling puts. Uh, or buying foods into the market. So then we broke through that level in most recent bull run. Right. We kind of tested that 41 42,000 ran all the way up to 45 and we found a bunch of sellers over there. Yeah. That's what we have to test.
How many sellers are at 50,000, 60,000, 70,000 and so on. So what I'm basing. Again, this is, this is uncharted territory. We have to really test them and see how many people hold Bitcoin. And these are mostly retail holders are going to be tempted to sell their coins. Add these levels. How many people, like you were saying at 80,000 will decide that there were other ever Tesla than one Bitcoin.
Yeah. That's the test that we have to go through. Yeah. Makes sense. Well, uh, many people didn't believe your call last year when you said big breach, nude hall, time highs, and, uh, look what happens. So I, I, uh, I'm looking very much for the price action this year. Thank you very much, Alex. Just to add one thing.
So we manage eight and a half billion. Uh, we have hundreds of thousands of customers and situational, corporate and retail, and that's why we have a much better view into the market. Then others who may be just retail or adjusting, like grace goes only institutional. So they don't really have their fingers in the retail market or in the corporate market.
So. Sentiment based on what you've observed then is it, is it, we know there's a lot of interest. It has reached mania levels. You think it does not like if you go on Google trends and you, uh, look, if you type the word Bitcoin and Google trends, you will see that the peak this year is lower than it. Wasn't 2017, meaning it's not all retail.
So if the price is higher, but the peak is lower, that peak of Google. Trends is lower. That means that most of the demand is not coming from the retail. Many, many more people know about Bitcoin already. And most of the demand is not coming just from retail. So it's that mix between corporate retail and institution.
That is the secret to this year. Run-up and you have to remember, the corporates are not selling that Bitcoin when micro strategy or Tesla buy it, they don't trade it. They don't sell it. It doesn't matter what the price is. They sit on it so that they actually going to reduce the volatility, not increase the volatility.
We still gonna have retail sellers. We still gonna have institutionals trading around their positions, but the corporate guys are like an anchor for Bitcoin. They're a, long-term anchor that stabilizes the price of Bitcoin. Okay. Interesting. Thank you very much, Alex. I appreciate your, uh, update today and, uh, thank you for your time.
Thanks for having me and thank you for watching. I'm David Lynn. Stay tuned from Juan Kitco. .