Bitcoin prices jumped 14 per cent on Monday after Tesla Inc., announced that it had invested $1.5 billion in the cryptocurrency last month.
The announcement sent Bitcoin soaring as high as $44,000 after the electric carmaker unveiled the investment ten days after its chief executive Elon Musk added a “#bitcoin” tag on his Twitter profile page and also two weeks after Musk encouraged small-time investors to buy bitcoin and meme-based digital currency Dogecoin as well as shares of US video game chain GameStop.
The carmaker also announced that it can begin accepting payment for its cars and other products with it in the near future which prompted a 7 per cent increase in the electronic currency.
The decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash, Tesla said in a filing. It added by saying that Bitcoin investment was done under the changed policy and could “acquire and hold digital assets from time to time or long-term”.
Tesla’s investment is another sign that the cryptocurrency is gaining widespread traction as a type of investment. Bitcoin is up almost 50% this year following gains of over 300 per cent in 2020.