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Musk backs currency

Bitcoin at new high following $1.5bn Tesla investment

The cryptocurrency hit new high valuation

Bitcoin surged to new highs after it emerged that electric car maker Tesla had purchased $1.5 billion worth of the cryptocurrency.

The company added that it is also planning to accept Bitcoin as a method of payment.

In a filing with the US Securities and Exchange Commission (SEC), Tesla said it may hold and acquire digital assets such as Bitcoin under a new policy to “further diversify and maximise returns on our cash that is not required to maintain adequate operating liquidity”.

The announcement sent the Bitcoin price surging 15% to $43,809, just short of its all-time high of $44,751 earlier in the day.

Tesla store in Edinburgh

Tesla says it will accept Bitcoin for purchases (pic: Terry Murden)

The current price level breaks the 8 January price level of $41,969. Buyers have retested the $40,500 resistance on four occasions to break it but to no avail, said Azeez Mustapha, a technical analyst at Inside Bitcoin.

Blockchain venture firm Coinsilium Group announced that its crypto treasury was up 17% to $2m in just the last three weeks.

Bitcoin’s market value increased to $834.2bn, making the cryptocurrency more valuable than all but seven of the world’s publicly traded companies, just ahead of Tesla itself with its market cap of $820.7bn.

Tesla’s founder and billionaire CEO Elon Musk has supported Bitcoin and other cryptos through a variety of statements.

Nick Jones, CEO of non-custodial wallet and payments platform Zumo, headquartered in Edinburgh, said: “Tesla’s investment is further validation of Bitcoin’s place as a premium asset for corporate, institutional and retail investors and we should expect to see more large purchases being announced in the coming months.

“Retail investors have been flooding into Bitcoin since December and “Papa Elon’s” intervention is set to grow this number exponentially, with the announcement of Tesla’s holdings already propelling BTC up over 12% to a new all-time high.”

US analyst Fawad Razaqzada of ThinkMarkets, told the Procative website: “This is probably one of the biggest developments for the crypto currency industry.

Nick Jones: validation

“Tesla is going to be a major player in the auto industry and if it starts accepting Bitcoin as a form of payment, it will give the digital currency further legitimacy.

“As more and more companies start accepting Bitcoin, this will only lead to further increases in demand in a market which is limited in supply.

“Therefore, the long-term outlook on Bitcoin remains bullish even if it is starting to look quite expensive in fiat currency terms.”

Markets.com’s Neil Wilson said Tesla’s support for the crypto “is the kind of backing that can take Bitcoin through $50k”.



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