Bitcoin soars to all-time high as Musk's Tesla says it bought $1.5B
Bitcoin soars to all-time high as Musk's Tesla says it bought $1.5 billion

                    
                                                                
                                                        


  
    

      
      

        
                            
            

          
          

        
          February 8, 2021 / 10:28 AM EST
          / CBS/AP
        
        




          

  
  
  Tesla has acquired around $1.5 billion in bitcoin under an investment policy at the electric car maker headed by Elon Musk, and it plans to begin accepting the digital currency as payment for its vehicles soon.The California company revealed the new strategy in a filing with the U.S. Securities and Exchange Commission early Monday, saying its investment in digital currency and other "alternative reserve assets" may grow.Wedbush Securities analyst Dan Ives called Tesla's move to back the cryptocurrency "a potential game changing move for the use of bitcoin" to make retail purchases.     
  "Ultimately, investors and other industry watchers will be watching this closely to see if other corporations follow the lead of Tesla on this crypto path or on the other hand does it remain a contained few names that make this strategic jump around bitcoin," he said in a research note. 
          
          
          
            

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              Bitcoin prices jumped 14% and appeared to briefly hit a new all-time high of roughly $44,000. Shares of Tesla moved higher as well, topping $870. The company's stock price has skyrocketed, soaring 481% over the last year and lifting its market value to $822 billion — more than Ford, General Motors, Toyota and Volkswagen combined. 

    

Around the world, electric vehicles represented almost 5% of all new car sales in 2020, but only 2.4% in the U.S. according to research firm Canalys.Bitcoin's boomIt'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 $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 $4,000 a coin.More recently Bitcoin rallied from below $11,000 in October and crossed $40,000 for the first time in its history.While in the last two years companies have embraced the technology that underlies digital currencies like bitcoin, a concept known as the blockchain, the actual uses for bitcoin have not really changed since its rally three years ago. It's still largely used by those distrustful of the banking system, criminals seeking to launder money, and for the most part, as a store of value.

    
    

But that could change if major companies follow Tesla's lead and begin accepting the digital currency as payment."This move could put more momentum into shares of Tesla as more investors start to value the company's bitcoin/crypto exposure as part of the overall valuation," Ives said.Telsa shares were up nearly $17, to $869 by midday Monday.Critics say Tesla's sales and profits are puny compared with established automakers such as Toyota and General Motors, and its huge valuation is not justified by financial fundamentals.

      

                  
        
      
        
    

    In:
          Tesla
          Elon Musk
          Bitcoin
      