Bitcoin Spikes to Record High Following $1.5bn Tesla Investment

The price of Bitcoin has surged today following the news that Tesla has purchased £1.5bn of the cryptocurrency. The news resulted in Bitcoin's share price jumping 17% to $44,220, a record high for the digital currency.  

According to Tesla, it made this investment in order to maximise on unused cash lying dormant within the business, with cryptocurrency investment making up a significant proportion of the firm's financial strategy for 2021.  

This comes just days after Elon Musk, the Founder of Tesla, added "#bitcoin" to his Twitter profile page, causing an initial price hike.  

In a stock market filing, Tesla said it "updated its investment policy" in January and now wanted to invest in "reserve assets" such as digital currencies, gold bullion or gold exchange-traded funds. 

It said it had already bought $1.5bn of Bitcoin and could "acquire and hold digital assets" in the future. 

“Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis," it said.  

Mr Musk said a week ago in a tweet that Bitcoin was "on the verge" of being more widely accepted among investors. This is something many of the world’s analysts are in agreement with. 

"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 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." 

But Neil Wilson, chief market analyst for Markets.com, warned that Bitcoin was a "very volatile" cryptocurrency. 

"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.