Tesla invests $1.5 billion in bitcoin
Bitcoin took another large stride toward mainstream acceptance on Monday after billionaire Musk’s Tesla Inc revealed it had bought $1.5 billion of the cryptocurrency and would soon accept it as a form of payment for cars, sending the cryptocurrency shooting higher. Since then, social media, especially Twitter, has been flooded with growth charts of the cryptocurrency, bitcoin memes, and Musk’s desire to indulge in the crypto market.
Bitcoin jumped as much as 15% after Tesla made the disclosure in a regulatory filing, with prices exceeding $44,000 for the first time. Tesla also said it would begin accepting the digital token as a form of payment for its electric cars. “The world’s richest man allocating $1.5 billion of his company’s treasury to Bitcoin speaks volumes about the magnitude at which crypto gains institutional adoption,” said Antoni Trenchev, managing partner and co-founder of Nexo in London. “Tesla has now paved the way.”
Bitcoin rates have surged 35 per cent since the beginning of the year and recently crossed above the psychological resistance level of $40,000. The cryptocurrency has rallied over 800 per cent since the beginning of April as more institutional and retail investors bought the currency as hedge against inflation.
Tesla’s move into bitcoin represents an investment of a significant percentage of its cash in the investment. The company had more than $19 billion in cash and cash equivalents on hand at the end of 2020, according to its most recent filing.