Bitcoin surges to over $ 44,000 after Elon Musk's Tesla purchased $ 1.5 billion
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.
The world's largest cryptocurrency was trading 15% higher at $ 44,141 after Tesla's announcement. According to Coin Metrics, it was the best day since April. 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 payment for products, "subject to applicable laws and initially on a limited basis."
The move makes Tesla the first major automaker to accept Bitcoin as a form 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.
"TSLA hasn't been a publicity-backed company in the past. Some will write off today's announcement as a marketing stunt, but at $ 1.5 billion, it would be a pretty big stunt," Bespoke Investment Group said in a note. "While it's easy to forget, TSLA is one of the largest companies in the world."
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