Tesla electrifies bitcoin, generating record-high value

Tesla Inc. said on Monday it had invested around US$1.5 billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a more than 10 per cent jump in the electronic currency.

Analysts said the move by one of the world’s bestknown companies was liable to prove a game changer for bitcoin.

A well-known supporter of bitcoin, chief executive officer Elon Musk has been weighing in regularly over the past week to a frenzy in retail investment, also driving up shares in meme-based digital currency dogecoin and shares of U.S. video game chain GameStop

Musk said a week ago that bitcoin was “on the verge” of being more widely accepted among investors and in December asked if it was possible to do large transactions in the currency.

“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.”

Bitcoin, which has set new record highs in recent months after a rollercoaster ride over the past decade, has also drawn support from major financial institutions this year. The world’s biggest money manager Blackrock recently changed a handful of investment mandates to allow some of its funds to invest in the currency.