The cryptocurrency market rally is continuing in 2021 so far after witnessing a strong rise in volume last year. Yesterday, Tesla (NASDAQ: TSLA) became the latest catalysts for Bitcoin that propelled its prices to new heights. The company revealed in its 2020 annual report that it has recently invested about US$1.5 billion in Bitcoin. TSLA also plans to start accepting Bitcoin as the payment for its products.
The news about Tesla’s Bitcoin investments triggered a massive buying spree in the world’s most popular cryptocurrency. It was trading at its highest level ever, near US$48,200 early morning on Tuesday. Interestingly, Tesla investors also seemingly favoured its Bitcoin investment move, as its stock settled with about 1.3% gains on Monday.
Elon Musk fuels crypto rally
Tesla’s Bitcoin investment came as a huge surprise for cryptocurrency critics. CEO Elon Musk — who remains highly active on social media platforms — last week fueled a rally in a meme-based cryptocurrency Dogecoin. On February 4, he started praising Dogecoin, termed it as “the people’s crypto,” in a series of tweets. Since then, Dogecoin’s price has more than doubled against the U.S. dollar.
A few days before that, he called Bitcoin “a good thing” on Clubhouse — a social audio app. On the same day, he changed his Twitter profile bio to “#bitcoin.”
Don’t make this big mistake in 2021
If you’re thinking of buying cryptocurrencies after Tesla’s investments in Bitcoin, you’re not alone. On Monday, the crypto market saw a huge trading volume. The volume was so massive and sudden that some crypto exchanges, like Coinbase, Gemini, and Binance, experienced technical issues.
Canadian investors can gain exposure to Bitcoin by investing in TSX-listed Bitcoin Fund. But buying cryptocurrencies with a small risk appetite could be the biggest mistake you could ever make with your hard-earned money.
But if you don’t want to listen to legendary investors like Warren Buffett — who hates cryptos — listen to yourself. Just think for a minute and look for even a single name in the world’s top billionaire’s list (including Musk) who became rich because of cryptocurrency investments. In contrast, most of the top billionaires are on the list because they hold the stocks of one or more successful companies.
Buy this EV stock instead
With Tesla stock already trading in the overbought territory, I find it much wiser to look for other investment options than TSLA or any cryptocurrency. BlackBerry (TSX: BB)(NYSE: BB) stock, for example, could be a perfect buy at its current market price.
BlackBerry stock has lost 24% in the last 10 days after the Reddit trading mania subsided. But these recent losses don’t affect its future growth potential in any way. The company has been readying to benefit from the surging electric vehicle (EV) and smart mobility demand. Its under-development, integrated vehicle data platform would help it be a part of the upcoming EV and autonomous car revolution, I believe.
BlackBerry’s QNX Neutrino operating system is scheduled to be used in the Chinese mass-produced electric cars. So, the fast-growing EV demand — which triggered a rally in Tesla stock last year — could start a long-term rally in BlackBerry stock anytime soon.
After buying BlackBerry stock, I wouldn’t have to worry about extreme volatility risks — like in the cryptocurrency market.
