Bitcoin jumps to record $44,000 as Tesla invests $1.5bn and says company will start accepting it as payment for cars ‘in the near future’
- Tesla has invested around $1.5 billion in bitcoin, the company said on Monday
- It also said it will start accepting payment for its cars and other products with it
- Bitcoin’s price surged to a record-high of $44,000 soon after Tesla’s announcement
- Tesla said its decision was part of its ‘broad investment policy’
- Analysts said the move by one of the world’s best-known companies was liable to prove a game changer for bitcoin
- Tesla CEO Elon Musk has been weighing in regularly over the past week to a frenzy in retail investment, driving up shares in dogecoin and GameStop
Tesla has just invested $1.5 billion in bitcoin and says it will start accepting the cryptocurrency as payment for its cars and other products in the near future.
Bitcoin’s price surged 10 percent to a record-high of $44,000 soon after Tesla’s disclosure on Monday morning.
Analysts said the move by one of the world’s best-known companies was liable to prove a game changer for bitcoin.
A well-known supporter of bitcoin, Tesla CEO Elon Musk has been weighing in regularly over the past week to a frenzy in retail investment, also driving up shares in meme-based digital currency dogecoin and shares of video game chain GameStop.
Tesla’s announcement, which was made in a US Securities and Exchange Commission filing, came just days after Musk briefly changed his Twitter bio to simply read ‘#bitcoin.’
Tesla has invested around $1.5 billion in bitcoin and says it will start accepting payment for its cars and other products with it in the near future
Bitcoin’s price surged 10 percent to a record-high of $44,000 soon after Tesla’s disclosure on Monday
Tesla said the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash.
It said it had invested an aggregate $1.5 billion in bitcoin under the changed policy and could ‘acquire and hold digital assets from time to time or long-term’.
‘In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash,’ Tesla said in announcing the $1.5 billion investment.
As a result ‘we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.’
Tesla will also ‘begin accepting bitcoin as a form of payment for our products in the near future,’ the company added.
Musk said a week ago that bitcoin was ‘on the verge’ of being more widely accepted among investors and in December asked if it was possible to do large transactions in the currency.
‘He’s now putting his money (shareholders’) where his mouth is,’ Markets.com analyst Neil Wilson said. ‘But given his recent comments – and adding #Bitcoin to his Twitter bio on January 29th – it also raises a real question about possible market manipulation.’
Musk said a week ago that bitcoin was ‘on the verge’ of being more widely accepted among investors and in December asked if it was possible to do large transactions in the currency
Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari, said: ‘I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move.
‘One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well.’
Bitcoin, which has set new record highs in recent months after a rollercoaster ride over the past decade, has also drawn support from major financial institutions this year. The world’s biggest money manager Blackrock recently changed a handful of investment mandates to allow some of its funds to invest in the currency.
Central banks remain skeptical of digital currencies, but analysts say the more real world uses appear for bitcoin, the more attractive it will prove as a long term store of value.
Musk has also recently endorsed other cryptocurrencies, including dogecoin, the coin based on a popular internet meme. Musk gave dogecoin a shoutout on Twitter last week sending its price to record highs over the weekend.
Late on Sunday, in a fresh endorsement for the cypto currency, Musk tweeted ‘Who let the Doge Out’ – mimicking lines from the famous song by Baha Men from the year 2000.
The coin has also received attention from California rapper Snoop Dogg by putting up an image of a dog tagged ‘Snoop Doge’ on his Twitter timeline.
Dogecoin was created largely as a satirical critique of the 2013 crypto frenzy and is not taken as seriously as bitcoin or ethereum. It almost doubled since Friday hitting a record $0.0871, according to data on blockchain and cryptocurrency website Coindesk.