Tesla Buys $1.5 Billion in Bitcoin, Boosting Price

CryptocurrencyTesla Buys $1.5 Billion in Bitcoin, Boosting Price

Tesla Buys $1.5 Billion in Bitcoin, Boosting Price

Six months after Tesla sold $5 billion in stock, Elon Musk, its founder and CEO, has announced he has invested $1.5 Billion in Bitcoin. It was confirmed in a filing through the SEC.
A few days before this announcement, Tesla posted a message on Twitter with the hashtag #bitcoin, which increased the value of Bitcoin to almost $45,000.
Also, Tesla has invested in Dogecoin. The digital currency, founded in 2013, It jumped by 50% in February, after Tesla’s founder called it the “people’s crypto”
According to the company, it has more than $19 billion in cash and cash equivalents on hand at the end of 2020.

Tesla opens a new path

On February 7th, Elon Musk’s company announced it bought $1.5 billion of Bitcoin in January. It will also accept Bitcoin as payment in the near future. 
As a result, the price of Bitcoin jumped 17% to 44,220 – which was a record high. According to the BBC, “Tesla said it was trying to maximise returns on cash that is not being used in day-to-day running of the company”.
Tesla’s press statement confirmed that it will “acquire and hold digital assets” in the future.

Read on Alvexo: “GameStop & Reddit Traders: A Wall on Wall Street”

A new chapter for Bitcoin?

Will Tesla’s investment be a game changer? To many experts, it will certainly encourage other companies to invest in Bitcoin, thus increasing the value of the cryptocurrency.

“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”, said Eric Turner, vice-president of market intelligence at cryptocurrency research firm Messari, reports the BBC.
However, experts remind that Bitcoin and other crypto currencies are extremely volatile, which happened again in the last week of February, where Bitcoin dropped 15% in only one day, from $58,000 to $48,000.

Dogecoin takes off, too  

Investors are keeping an eye on Dogecoin, too, since Elon Musk has also invested in this cryptocurrency that he calls “the people’s crypto”. 

Dogecoin was created in 2013 and just like any cryptocurrency, is not regulated and can pass international borders quickly.
Two weeks ago, Elon Musk announced that he wanted to help dogecoin become “the currency of the Internet”.The balance of just over 36 billion Dogecoins is worth over $2 billion at today’s prices”, concludes the Independent. 
At the moment, only 19 digital wallets, which means only a few dozen people in the world own Dogecoin.  It is currently worth $0.05. 
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.