Tesla's Bitcoin Wager, Rising Yields, and Ed's Take on the Banks

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 8 February 2021

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

DB-Feb7, 2021. Real Vision managing editor Ed Harrison and editor Jack Farley discuss Tesla’s decision to buy $1.5 billion worth of Bitcoin as a reserve asset on its balance sheet. They then analyze the how rising yields on the 10-year and 30-year Treasurys will impact growth stocks as well as bank net interest margins. Using bank profitability as a jumping off point, Jack notes that the S&P 500 Financials Sector SPDR ($XLF) is at all-time highs, and Ed analyzes why this could be the case, sharing his outlook on the future of the U.S. banking industry. Lastly, Jack and Ed give a sneak peek of the interviews coming up for the “Is Everything a Bubble?” campaign with Howard Marks, Joel Greenblatt, Mark Cuban, Felix Zulauf, Lyn Alden, Lacy Hunt, Tom Steyer, Mark Yusko, Danielle DiMartino Booth, Steve Clapham, and many other investors. To share your thoughts about “Is Everything a Bubble?” on the Real Vision exchange, click here: http://rvtv.io/3ju1T6q. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Tesla adds Bitcoin to its corporate treasury. The U.S. 30-year yield is now above 2%, and
0:17.8	the XLF financial sector ETF is now above its 2007 highs. There's so much to talk about
0:25.1	and I'm very glad to be joined by Real Vision Managing Editor Ed Harrison to break it all down.
0:30.5	Ed, are you doing? Very good. Let's get right into it. Let's get right into it. So with the first
0:36.7	story, we have Tesla Motors announcing its annual report today that it added $1.5 billion worth
0:44.6	of Bitcoin to its policy, and it also indicates that it will plans on accepting Bitcoin as a form
0:52.0	of payment. Bitcoin surged to $43,000. Ed, what do you make of this? Yeah, I even saw $44,000. I think
1:07.4	it's very interesting. I was talking to Lynn Alden today. This is an interview that's going to
1:12.3	appear in the platform on Thursday and asked her what she thought about it because she follows the
1:16.7	crypto space very closely, and her view is that it's a positive thing by and large. You're not going
1:24.3	to see Proctor and Gamble, she says, do this move anytime soon, but at a minimum, you could see
1:32.2	more adoption by other corporates into the crypto space, specifically Bitcoin as a result of this.
1:39.2	They'll be thinking about it again as a result of Elon Musk being sort of a first mover. He's
1:44.3	probably the third mover, this Michael Sayler, who did this. Another company that Lynn mentioned
1:49.3	that I can't remember, and then now Tesla as well. The big thing is in terms of the announcement,
1:55.6	in terms of accepting Bitcoin as payment, it's all about the volatility at this point in time.
2:02.1	Once the volatility slows down, once you have more adoption, then you'll get more adoption.
2:09.2	It's a bit of a chicken and an egg in terms of getting that happening, and it's just a matter of
2:17.1	time as long as the volatility goes down. That's the key difference here.
2:23.3	I think it's important for the Bitcoin ecosystem, for people to actually use it as a currency,
2:28.7	as a medium of exchange, rather than just as an investment, because that way it will increase
2:34.3	the velocity. Ed, it's interesting now, if you look at the market cap of Tesla to Bitcoin,
	...

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