Tesla Takes Bitcoin to US$48,000: 1 Big Mistake to Avoid in 2021

On Tuesday morning, Bitcoin reached another record level near US$48,200, as the Tesla (NASDAQ:TSLA) fueled rally continues. But you must avoid this big mistake of buying cryptos in 2021.

| More on:

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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla and Twitter. The Motley Fool owns shares of and recommends Tesla and Twitter. The Motley Fool recommends BlackBerry and BlackBerry. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Tech Stocks

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

OpenText stock has fallen in the last few years, but that could mean this top tech stock remains an undervalued…

Read more »

AI microchip
Tech Stocks

Celestica Stock: Buy, Sell, or Hold?

Celestica's stock price has rallied 950% in the last five years. Will the AI boom send it even higher in…

Read more »

data analyze research
Tech Stocks

2 Ridiculously Cheap Growth Stocks to Buy Hand Over Fist in 2024

Well Health Technologies is a cheap growth stock to buy for its record-breaking results, massive revenue growth, and profitability.

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

4 Reasons to Buy Kinaxis Stock Like There’s No Tomorrow

Kinaxis stock has a strong past. But there is even more to look forward to from this top tech stock.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

The Future of AI: Best Canadian Stocks to Buy Now

Here are two of the best AI-focused stocks in Canada that you can consider adding to your portfolio before it’s…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Tech Stocks

2 TFSA Stocks to Buy Right Now With $7,000

Are you looking for growth stocks that can help you maximize the tax-free withdrawals of the TFSA? This article is…

Read more »

cloud computing
Tech Stocks

3 No-Brainer Tech Stocks to Buy Right Now for Less Than $1,000

Not all tech stocks are the risky investments that many think they are. Which is why we're focusing on the…

Read more »