FinTech News

Bitcoin Soars to Record High As Tesla Announces Plans to Accept the Cryptocurrency

Just as Bitcoin ended 2020 in style, it seems to be having an even better 2021. Although the asset remains volatile, it’s seen a fairly steady rise in recent months — a far cry from the crash observed just a few years earlier. Now Bitcoin is getting another boost in both price and endorsement as Telsa has announced a major purchase of the cryptocurrency.

As CNBC report, an SEC filing reveals that Tesla purchased $1.5 billion worth of Bitcoin. These assets will give the car manufacturer liquidity in $BTC as it plans to begin accepting the cryptocurrency as a form of payment “in the near future.” However, the company also notes that this new policy will be fairly limited at launch.

Tesla’s announcement seemingly helped push prices for Bitcoin higher on Monday morning. In fact, $BTC set new records as it topped $43,000 per coin. This marks merely the latest bull run for Bitcoin, which previously broke through the $20,000 mark late last year, setting what was then a new record — its first in three years.

Although purchasing Bitcoin may sound risky for companies due to the volatile nature of crypto, Tesla isn’t the only publicly-traded company to do so. For example, in October of last year, Square announced that it had purchased $50 million in $BTC. At the time, Bitcoin was trading for around $10,600 per coin. Even prior to that purchase, Square CEO Jack Dorsey had expressed interest in the asset, tweeting, “Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand.” Notably, Square also allows users to trade Bitcoin on its Cash App and the company saw $875 million in Bitcoin revenue during the second quarter of their last fiscal year.

While Tesla’s announcement may have been a boon for Bitcoin this morning, over the weekend, Tesla CEO Elon Musk has also helped goose another cryptocurrency. Dogecoin — often referred to as a meme coin due to its origins — climbed from a worth of $0.047 per coin to around $0.080 in recent days as Musk tweeted about the asset multiple times. The latest push for Doge comes after a previous spike that saw the coin liftoff from $0.007 on January 26th up to nearly $0.04 the following day as it joined other so-called “meme stocks” including GameStop and AMC in experience meteoric rises (although both stocks have since faded significantly).

Despite the inherit risks that come with investing in cryptocurrency, for a company such as Tesla, purchasing Bitcoin and accepting BTC as payment could make a lot of sense. While the move may get flack from some, Musk has shown a knack for proving doubters wrong. Will he be able to do so again in this instance? Only time will tell.