TESLA INVESTS $1.5B IN BITCOIN, CURRENCY SURGES TO $44,000

Tesla has invested around USD 1.5 billion in Bitcoin and said it plans to begin accepting the digital currency as payment for it highend vehicles soon. The price of Bitcoin soared 15 per cent to above USD 43,000 Monday morning.

The California-based electric car maker headed by Elon Musk revealed the new strategy in a filing with the U.S. Securities and Exchange Commission, saying its investment in digital currency and other "alternative reserve assets" may grow.

Bitcoin rose to USD 43,863 and briefly hit a new all-time high. Shares of Tesla moved higher as well.

In its fourth-quarter earnings report last month Tesla said it had cash and cash equivalents of USD 19.4 billion.

Dan Ives of Wedbush Securities said the move gives Tesla "more flexibility to further diversify and maximise returns on its cash."

Palo Alto-based Tesla reported its first annual net profit in 2020, and its stock soared to make it the world's most valuable automaker. Tesla joined the S&P 500 late last year and is currently valued at more than USD 820 billion.

It's been a wild ride for Bitcoin since it made its Wall Street debut in December 2017. Major futures exchanges rolled out bitcoin futures, pushing it to roughly USD 19,300, a then-unheard of price for the currency. It evaporated quickly in 2018, and by December of that year Bitcoin was worth less than USD 4,000 a coin.

More recently bitcoin rallied from below USD 11,000 in October and crossed USD 40,000 for the first time in its history.