Tim Draper, the billionaire Bitcoin (BTC) investor who too invested early in Tesla, reacted to the visitor's CEO and world'southward richest man, Elon Musk, adding #Bitcoin to his Twitter bio to join the likes of Twitter CEO Jack Dorsey and Reddit co-founder Alexis Ohanian.

Draper, who holds around 30,000 BTC according to reports, told Musk that he would like to pay for the Tesla cybertruck with BTC while promoting his Bitcoin payment processor portfolio company OpenNode. He said:

"Hi Elon Musk, I would similar to purchase a Tesla cybertruck. Although I personally would rather continue my ain #bitcoin, you can accept #bitcoin through our Draper VC company OpenNode."

Why now?

On Jan. 29, Bitcoin proceeded to rally by 14% in merely 30 minutes soon after Elon Musk's Bitcoin back up began circulating on social media.

Many speculated that Musk could have been the high-net-worth investor backside the massive Bitcoin accumulation on Coinbase in the past calendar week.

In the by several days, the premium on Coinbase skyrocketed to around $200, compared to Binance. This ordinarily indicates significant buying action from U.Southward. investors.

However, Musk did not follow up on the bio change, and overnight, the rally reversed. Bitcoin rose from $33,000 to over $38,000, and dropped back down to $33,000.

Draper probable tweeted at Musk due the interest in Bitcoin from Musk and the positive market place sentiment around BTC.

In a recent interview with CNBC, Draper said that he is actually buying more than Bitcoin. Draper also said that he does non intend to sell BTC in the futurity, expressing his strong belief in Bitcoin as a "currency of the future." He said:

"I'm actually but buying more [Bitcoin]... I take no interest in ever selling my #Bitcoin for dollars. Why would I have the currency of the future and sell information technology for the currency of the past?"

On-concatenation data shows that Draper isn't the only one focused on long term gains.  In fact, "HODLing" activity, which indicates the intent of Bitcoin investors to hold BTC for a long time, is at record highs.

Bitcoin 1-year HODL wave. Source: Lookintobitcoin

Will Bitcoin e'er exist used as a currency?

Bitcoin is increasingly becoming considered as a shop of value and an alternative to gilt as a safe-haven asset. In contempo months, though, the correlation and changed correlation between Bitcoin, golden and stocks have been decreasing.

Bitcoin correlation vs. Due south&P500,VIX, DXY, Gold. Source: Digital Avails Data

In add-on to the massive price gains, the fright of inflation and the big injection of liquidity by primal banks have stirred massive involvement among institutional and loftier-net-worth investors.

But while accepting BTC is becoming increasingly common, the question remains whether Bitcoin would ever be used as a currency and a medium of commutation like the dollar today.

Ironically, when the price of Bitcoin is in a clear uptrend, investors are less likely to sell or spend their BTC. Draper himself is suggesting that he will probably pay the $forty,000 for the Cybertruck with dollars rather than the "currency of the future."

However, if Bitcoin price stabilizes in the futurity at a loftier plenty price level and sees lower volatility, then BTC could become more compelling for everyday payments.

Meanwhile, every bit the network gains more than users and must scale, the Bitcoin blockchain network may ultimately become inefficient to use for everyday payments on the beginning layer.

At that point, 2d-layer scaling solutions, similar Lightning Network and sidechains similar Liquid, for example, may become the blockchain "apps" for processing small payments instantly. Such interoperable platforms will likely have their own tradeoffs with varying degrees of trustlessness, privacy and decentralization.