The Bitcoin Cryptocurrency surged to an all-time high after Elon Musk's electric vehicle company Tesla invested $1.5 billion in January 2021.
The Bitcoin Cryptocurrency surged to an all-time high after Tech billionaire Elon Musk’s electric vehicle company Tesla invested $1.5 billion in January 2021. The digital asset price jumped to 15% with prices nearing nearly $45,000 for the first time.
According to a Bloomberg report, the news was revealed after a filing with the Securities Exchange Commission. The document filed by the car manufacturing company read, “We updated our investment policy to provide us with more flexibility to diversify further and maximize returns on our cash that is not required to maintain adequate operating liquidity.”
In another significant move, Tesla has also said that the company will start accepting Bitcoin as payment for its product and services in the future. The move is seen as a massive sign of support for the cryptocurrency, which policymakers have criticized for facilitating money laundering and fraud.
In an interview on The Good Time Show via the Clubhouse app Sunday night, Spacex and Tesla CEO Elon Musk talked about bitcoin.
“I’m a supporter of bitcoin and I think bitcoin is really on the verge of getting broad acceptance by conventional finance people,” he said.
In recent weeks, Musk also changed his Twitter profile to say just “#bitcoin” and tweeted, “In retrospect, it was inevitable.”
As reported by NDTV, managing partner and co-founder of Nexo in London Antoni Trenchev commented about Tesla investing in the cryptocurrency. He said, “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. Tesla has now paved the way.”
Trenchev also said that he expects that at least 10% of S&P 500 companies will be investing in Bitcoin by the end of 2022.
Apart from Tesla, scores of companies have invested in the Bitcoin cryptocurrency. MicroStrategy Inc. has invested nearly $1.1 billion on the token. Square Inc., headed by longtime crypto advocate Jack Dorsey, also converted about $50 million of its total assets from the second quarter of 2020 into the token. Bill Miller of Miller Value Partners has said this was just the start of what was sure to be a trend across Main Street.
Apple is also slated to enter the cryptocurrency market, both by allowing bitcoin to be exchanged on its Apple Wallet service and investing some of its own reserves in units of the cryptocurrency, said Mitch Steves, an analyst at RBC Capital Markets.
According to Rahul Pagidipati, CEO, ZebPay, “This is a surprise that is also not a surprise at all. Elon Musk has been talking about bitcoin for a long time.”
Pagidipati saw the number of users on ZebPay more than doubled right after the news. He said, “It’s a sign to other companies that bitcoin is a solid reserve asset for any balance sheet. We hope central banks will join in and that this news helps nudge the government to buy, not ban bitcoin and let every Indian do the same.”
It is also worth pointing out that Bitcoin rates have increased by 35% since the beginning of 2021. It again recently crossed above the psychological resistance level of $40,000. Since April last year the cryptocurrency even gathered over 800% as more and more institutional, retail investors bought the currency as a hedge against inflation.
However, the situation is seen quite the opposite in India, since the government aims to bring a bill in the Parliament to ban the use of private cryptocurrencies. Instead, the government has plans to launch a central bank digital currency created by the Reserve Bank of India.
As per Times Of India report, the central bank’s internal panel is also working on a digital currency model to rival private cryptocurrencies like Bitcoin.