Tesla's decision to buy into bitcoin affected the market positively as Elon Musk, owner of the company, had long been a bitcoin critic.
Musk became a supporter recently and, in what many would call inevitable, has finally bought into the crypto market.
Major Signals
- Elon Musk, owner of Tesla, recently publicly acknowledged that he supports Bitcoin.
- Tesla bought bitcoin worth $1.5 billion, which is just 10% of the company's liquid cash.
- The company indicated the possibility of bitcoin being a medium of payment for its products.
- Other Fortune 500 companies and corporations are expected to follow suit.
Tesla, the leading electric car manufacturing company owned by billionaire and world's richest man, Elon Musk, disclosed on February 8th that it had bought bitcoin worth about $1.5B. The news was revealed when the company filed with the Securities exchange commission on Monday. The electric car conglomerate announced in filings with the SEC that in the future, it plans to buy more BTC. It also indicated the likelihood of using cryptocurrency as a payment medium for its products and services.
News of Tesla's investment sent the price of bitcoin skyrocketing. Traders rushed to buy more BTC after Tesla announced a $1.5B buy-in into BTC. It gained by over 20% to reach a new high at $48,216. Its market dominance grew by 5% to hit 64.83%, its highest point since January 29th. It also bounced back into second place on the best-performing cryptocurrency index. Its market capitalization stood at $891 billion, and interestingly, it has surpassed the market capitalization of Tesla itself, which is vàlued at $811 billion.
It marked a significant moment for bitcoin, as it signifies the entrance of a major corporation into bitcoin. Just this year alone, Bitcoin is already up 67%, and in comparison to this time last year, its price was then at $9,858, and today it's trading above $46,000. An increase of almost 400%.
Little wonder then that many expect it to keep rising. Analysts expect this to be the beginning. A lot of them are predicting BTC hitting $50,000 by the end of this week. Many other institutions, financial corporations, and companies are expected to jump on the bandwagon now. According to Eric Turner, a vice-president of Messari, a cryptocurrency research firm, A Fortune 500 company, one of the world's biggest companies is a bitcoiner. Consequently, all of Tesla's investors, shareholders, and even other corporations are likewise exposed to bitcoin.
