Read this scenario and answer the question below:

Case Scenario

The Issue

The price of cryptocurrencies skyrocketed in February when Tesla CEO Elon Musk announced that the company had purchased USD 1.5 billion of Bitcoin, and said it would begin accepting payments in the currency. The value of all cryptocurrencies rose to more than USD 1 trillion as a result. The sharp increase in value also follows a proliferation of apps allowing users to trade cryptocurrencies and a growing number of companies that are similarly turning some of their cash into digital assets.

However, later the same month, Bitcoin's value fell dramatically after U.S. Treasury Secretary Janet Yellen called it "extremely inefficient" and warned about its use in illicit activities. Bitcoin, like other cryptocurrencies, is not controlled or regulated by a central authority. Even as it gets more attention from wealthy investors such as Musk (Twitter is also reported to be considering an investment), it's a risky bet given its volatility, with Yellen cautioning against its nature as a "speculative asset."

Despite the warnings, Bitcoin and other cryptocurrencies have since made a comeback. And with Tesla investing so much capital in Bitcoin, the company's share price is now directly tied to the value of the cryptocurrency. Accordingly, Musk has taken to tweeting about it often, along with other digital tokens including Ethereum and Dogecoin.

Why Is It News?

The price of Bitcoin and other cryptocurrencies have continued to climb after the fluctuations following Tesla's announcement, and their performance has sparked the interest of both investors and Wall Street banks. Banking giant JPMorgan is now exploring Bitcoin and cryptocurrency clearinghouse options(essentially acting as middlemen between traders who ensure payment in case one party defaultsa measure to avoid liquidity problems). This development comes after the bank had ramped up cryptocurrency services over the last year.

Bitcoin's steady progress in earning Wall Street's acknowledgment as a legitimate asset coincides with a growing interest in Bitcoin from amateur, everyday traders. Following the price surge and Tesla's large investment, a survey revealed that many recipients of stimulus checks plan to invest in Bitcoin. Despite the risks and inherent volatility of an unregulated currency, Bitcoin seems to be progressing toward more widespread acceptance, indicating that demand for and interest in it may ultimately beat out the warnings cautioning against investment.

1. Do you think Tesla's investment in Bitcoin will lead other companies to make similar investments in cryptocurrency?

2. What types of risk are associated with investments in cryptocurrency?

2. What impact do you think the acceptance of banks such as JPMorgan will have on interest in Bitcoin?

3. How do you think these developments might affect the general perception of Bitcoin and other cryptocurrencies? What predictions would you make about their future?

4. Reflection - Reflect on what you learn from this case study.