The price of bitcoin surged above $47,000 on Tuesday, building on gains following news that electric-car maker Tesla has invested $1.5 billion in the cryptocurrency and may accept it as future payment for products.
After reaching a record of near $44,000 on Monday, bitcoin prices
hit $45,000, $46.000 and $47,000 later that evening, according to CoinDesk. Prices were last trading at $47,651 on Tuesday.
Sparking the fresh surge for bitcoin was a Tesla
regulatory filing with the Securities and Exchange Commission on Monday. It revealed Tesla acquired $1.5 billion in bitcoins in January and plans to accept it “as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”
Read: Musk’s Tesla says it invested $1.5 billion in bitcoin, sending the cryptocurrency to record levels near $44,000
That’s as Musk has been recently voicing support for cryptocurrencies on his Twitter account.
For the bitcoin faithful, it was a monumental move by a big company to invest in the digital currency and allow payments. But on the other side, some analysts questioned Tesla’s move, given the volatility of the cryptocurrency, as well as share prices of the electric car maker.
Even if bitcoin’s price multiplied by five over the past year, it could still come crashing down, Ipek Ozkardeskaya, senior analyst at Swissquote, told clients in a note. “The high volatility in Bitcoin’s value will therefore inevitably inject a certain volatility in Tesla’s revenue, and decrease the predictability of the company’s performance.”
Bitcoin’s year-to-date gain is up more than 60% in 2021. That’s against a 4% rise for the S&P 500
and an 8.5% gain for the Nasdaq Composite Index
is down around 3% and crude oil prices
are up 20%.
Read: Should I buy dogecoin? Why prices of the cryptocurrency are surging — but risky