Bitcoin, the cryptocurrency, has been soaring since the fall of last year, hitting record highs. Many supporters and some cryptocurrency experts have asserted that cryptocurrency has entered a new era. After years of downturn, the currency has a bright future. In October, PayPal, the payment platform, announced that it would support bitcoin payments in the future. Many people believe that bitcoin will achieve lasting stability. It has won the support of financial institutions and become a widely accepted currency. So what does Tesla’s announcement of buying a large amount of bitcoin directly led to a 15% rise in the value of bitcoin? A week ago, Elon Musk, Tesla’s boss and billionaire, announced that he would use about 10% of Tesla’s cash reserves (US $1.5 billion) to invest in bitcoin, and said consumers could use bitcoin directly to buy Tesla electric cars in the future. Bumpy road ahead, this is the largest enterprise sponsored investment in bitcoin history. This naturally raises the hopes of bitcoin fans. However, it also reveals bitcoin’s bumpy road to get rid of the image of a hippie investment vehicle and become a plain common currency. It is no secret that musk is interested in cryptocurrencies. On twitter, he often publishes bitcoin related content. In the cryptocurrency circle, musk is also highly respected. The more important question is: why should Tesla invest bitcoin at this time when the company is not running well? At present, Tesla’s electric vehicle production still fails to meet the demand, and the vehicles ordered by customers often take several months to deliver. Workers complain that wages are too low and working conditions are bad, and these problems have not been solved. Why not invest $1.5 billion in these links? One possible reason: Tesla bought bitcoin not to invest in itself, but to strengthen its core brand. Musk’s calculations Tesla and its founder, musk, have a long established reputation for being keen on the latest technology. The latest decision to invest in bitcoin is a shrewd move: it can prompt people who already admire musk to buy Tesla electric cars; meanwhile, bitcoin fans can be in the spotlight again. Musk may think that this is a good time to turn the favoritism of supporters into capital. The acceptance of bitcoin payment will further enhance Tesla’s image as a future enterprise and attract some people who think they are far sighted to buy cars: they will be overjoyed to buy future cars with future currency. But from an investment point of view, musk is also aware of the sensitivity of cryptocurrencies. He knew that once Tesla announced that it could buy a car with bitcoin, the value of the currency was likely to soar. Now, Tesla has invested $1.5 billion to buy bitcoin, and the value of the currency has risen by 15%, which means Tesla has made more than $200 million on this deal. Although the appreciation of bitcoin triggered by Tesla is exciting, we can also see the great volatility of bitcoin value. For bitcoin, which wants to be a payment tool, this is not a blessing. Although a higher currency makes bitcoin more popular as an investment object, it is a hindrance to bitcoin as a means of payment: it means deflation. Reuters reported that a bitcoin enthusiast regretted buying Tesla with bitcoin in 2016: at that time, he bought bitcoin for $130000 and then used it to buy Tesla electric vehicles through the payment gateway service. If he hadn’t used these bitcoins to buy Tesla electric cars, he would now have $14 million in assets! Payment in bitcoin was “trendy” in those days, but the supporter admits that this “novelty” can only be a comfort before the huge asset gap. It is still not a practical currency. If there is a magic that can make bitcoin the world’s leading currency overnight, we will immediately suffer from severe deflation. People will hoard bitcoin and will not use it to buy goods. This will cause prices to fall. At present, bitcoin is such a good investment object that it is not suitable to be a practical currency. The paradox is that Tesla’s actions, at least in the short term, exacerbate the phenomenon. Tesla allows bitcoin to buy cars, which can strengthen people’s trust in cryptocurrency. Other companies will follow. Even if they don’t invest in bitcoin, they will accept bitcoin payments for fear of falling turnover. As more and more institutions join the bitcoin boom, we can be sure that bitcoin will continue to appreciate. But, given the belief that “everyone else will pay in bitcoin,” no one will actually pay in bitcoin in the end.