Similar to a surging social media influencer who gains further legitimacy when an entertainment icon retweets them, Bitcoin received a huge push from business icon Elon Musk.
Bitcoin’s price rocketed to its record high when Musk’s company Tesla announced its $1.5 billion stake in the cryptocurrency, trading at more than 13% higher, at $43,315, approaching noon ET Monday.
Bitcoin stayed red-hot, having finished 2020 worth four times more than it was to start the year, with some help from Musk’s tweets about the cryptocurrency that stirred increased interest.
Tesla’s Monday announcement, in a Securities and Exchange Commission filing, included a statement on the purchase citing “more flexibility to further diversify and maximize returns on our cash.”
The future-conscious company also indicated that it would eventually accept bitcoin as payment for products “subject to applicable laws and initially on a limited basis,” making Tesla the first major automaker to do so.
The business trend includes Fidelity Investments, PayPal and Square, all of whom jumped on board in 2020.
In a BBC News story, reaction was mixed.
“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, a vice president at Messari, a cryptocurrency research firm.
Other experts, such as Markets.com chief analyst Neil Wilson, warned Bitcoin was still unpredictable.
“Tesla is now starting to take on big (foreign exchange) risk – this may not worry a lot of investors, but some conservative types might be concerned,” he said.