Finance

Bitcoin surges above $44,000 to record after Elon Musk’s Tesla buys $1.5 billion worth

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Bitcoin’s price rose sharply to an all-time high after Tesla announced a large stake in the cryptocurrency and announced it would accept payments in digital coin for its products.

According to Coin Metrics, the world’s largest cryptocurrency traded 15% higher at $ 44,141 after Tesla’s announcement. Bitcoin has just ended a banner year, the price of which more than quadrupled in 2020.

In a filing with the Securities and Exchange Commission, Tesla announced Monday that it had purchased $ 1.5 billion worth of Bitcoin in order to “allow more flexibility in further diversifying and maximizing the returns on our cash.” It also said it could invest a future portion of its assets in digital assets and that it will accept Bitcoin as a means of payment for products, “subject to applicable laws and initially to a limited extent”.

The move makes Tesla the first major automaker to accept Bitcoin as a means of payment.

Tesla’s stake in Bitcoin “will have an impact on companies around the world,” Wedbush analyst Dan Ives said in a note. It is a “possible game change for using Bitcoin from a transactional perspective”.

CEO Elon Musk has been talking about both bitcoin and meme-inspired token dogecoin in recent tweets, which many believe may have fueled the recent surge in these assets.

Tesla’s investment in Bitcoin is the latest sign that the volatile cryptocurrency is widespread. Last year, Fidelity Investments, Square, and PayPal announced major moves in this space that will allow their customers to participate in the digital assets.

Interest from high profile investors like Paul Tudor Jones and Stanley Druckermiller has also boosted the token. Many even believe that Bitcoin has the potential to replace safe haven gold with some institutional investors.

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Robert Dunfee