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All you need to know about Tesla, Bitcoin and the cryptocurrency boom
One of the most valued companies on the stock market said that it has invested $1.5 billion in bitcoin.
Bitcoin on Tuesday hit a new record high of $47,000 after a mainstream firm as big as Elon Musk's Tesla betted huge on the largest cryptocurrency. The digital currency first came into existence in 2009 and is totally decentralised with no one central power to administer it. Individuals have private keys that provide them with access to their stored currency.
Bitcoin garnered attention in the past few years and it gained most of the traction last year, the year of uncertainty when stocks were tanking with effects of the global economy under pressure due to the coronavirus pandemic.
What has happened?
The leading electric vehicle manufacturer Tesla legitimised the controversial digital currency by announcing that it may start accepting payment for its car in the form of cryptocurrency. The company added that it is holding some of its cash in the form of bitcoin instead of traditional currency.
"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, which we may or may not liquidate upon receipt," Tesla said in its annual filing with the Securities and Exchange Commission.
Not only that, one of the most valued companies on the stock market said that it has invested $1.5 billion in bitcoin. The investment decision comes as part of investing a portion of 'such cash in certain alternative reserve assets including digital assets'.
The company's annual filing for the year ended on December 31, 2020, rose bitcoin 12 per cent with Tesla's share rising up 2 per cent in early trading on Monday, as reported by CNN.
The Bitcoin boom
Experts are crediting the likes of Musk, the interest of long-term investors, speculators at work as the reason for a durable Bitcoin rally. The crypto mania is also being equated to GameStop play in Wall Street. The biggest endorsement from one of the major companies has Michael Saylor, chief executive officer of MicroStrategy Inc. declaring Bitcoin as the 'scarcest asset' in the world, reported Bloomberg.
Also Read | Elon Musk, back on Twitter, turns his support to Dogecoin
Founder of crypto investment firm Galaxy Digital Michael Novogratz believes the currency will reach $100,000 by the end of the year, reported Bloomberg.
The largest currency has been designed to have a fixed supply of 21 million coins, all entries are made on a digital ledger distributed across computer networks.
Tesla's announcement could be a catalyst in the world of digital currency as it has not only boosted Bitcoin tremendously but its alternatives like Ether, Dogecoin and Binance are also surging.
Analysts believe, Bloomberg reported, after Tesla, many companies will join in the momentum and will begin accepting digital tokens.
