Tesla announced Monday it has bought $1.5 billion worth of Bitcoin. Following Tesla’s announcement, Bitcoin values soared to new highs on Tuesday, touching a price of at least $48,003. In premarket trading, Tesla shares were up more than 2.5 percent. Tesla claims that in the foreseeable future it will also “start accepting Bitcoin as a form of payment for products.” In its SEC filing, Tesla alerted investors of the volatility of the Bitcoin price.
Experts said it could help speed up a step into the mainstream for Bitcoin, which has seen both Paypal, also co-founded by Musk, and BlackRock, a major multinational fund manager, move to embrace the currency.
As per Reuters, “I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move,” said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.
“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well.”
We hold and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss, Tesla wrote in their SEC filing
“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.5 billion in Bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”
The global market cap for all cryptocurrencies is at $1,387 trillion at the time of publishing, according to data from Coinmarketcap. Bitcoin holds the largest market share with a market cap of $870 billion, followed by Ethereum with a market cap of $206 billion.
Is the next threshold for Bitcoin $50,000?
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