News that the world's largest cryptocurrency exchange, Binance, is being investigated by the US Department of Justice and the Internal Revenue Service for alleged money laundering and tax violations sent a number of cryptocurrencies plunging, with bitcoin again slipping below the US$50,000 mark.

One should never underestimate the impact of policy factors on global financial markets. As I have repeatedly emphasized over the past two months, cryptocurrencies have begun to affect the status of major global currencies, and it's only a matter of time before countries step up their surveillance on the industry.

Therefore, the actions of the DoJ and IRS should not surprise us.

But what's grabbed the attention of investors isn't the investigation into Binance by the DoJ, the IRS or even The Commodity Futures Trading Commission. Instead, it's the actions of Tesla - a big supporter of cryptocurrencies. The electric car maker, which previously said it will allow consumers to buy Tesla with bitcoin, suddenly scrapped the arrangement last week.

Its billionaire founder Elon Musk said Tesla will halt sales of cars using bitcoin due to the effects on the environment that cryptocurrency mining can have.

He was "concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."

So though he believes that cryptocurrency has a promising future, "it should not lead to huge damage for the environment."

It's very nice of Musk to be concerned about the environment but it's a bit of a coincidence that the DoJ and IRS launched an investigation into Binance shortly after Tesla said that it would no longer accept bitcoin as payments.

Of course, conspiracists will say Musk was under pressure from Washington to abandon the plan, but Tesla's latest quarterly results reveal it sold 10 percent of its bitcoin assets worth US$272 million during the first three months of 2021, and that it netted $101 million from the sale.

Musk probably doesn't have any "private deal" with Washington. He's just a very astute player who knows how to leverage his influence and use his PR skills to make money for himself and Tesla in the cryptocurrency market. And the best thing about Musk's PR skills is that he knows how to keep an eye out for changes in US government policy.

He's probably already realized that the US government will not allow cryptocurrencies to flourish unfettered and will prevent bitcoin and other digital assets from affecting the US dollar's pre-eminent position in the world.

This is why Tesla went ahead and sold a portion of its bitcoins early and made a profit, and was even one step ahead of the US Justice Department and IRS, by scrapping bitcoin as a mode of payment for its cars.

Therefore, if investors are interested in cryptocurrencies because of Musk, it is better for them to give up these dreams for now and invest in Tesla instead.

In particular, the level of US$540 for Tesla should have certain support, and even if it falls in the short term, the stock's long-term investment value is surely higher than bitcoin's, because Tesla has Musk - who knows when to enter and when to retreat.

It may be a bit immoral for Musk to use his influence on the cryptocurrency market to make a profit, but he's not forcing anyone to follow him.

And if investors trust Musk's investment instincts, then why not directly invest in Tesla, which is the billionaire's own brainchild?

Musk might drop bitcoin like a hot potato at any time but it's unlikely that he will ever ditch Tesla.

Andrew Wong is chairman and CEO of Anli Securities

Bitcoin believers are better off buying into Tesla