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Bitcoin crosses $44,000 mark on $1.5 billion boost from Tesla

Tesla on Monday announced that it purchased $1.5 billion worth of bitcoin for "more flexibility to further diversify and maximise returns on its cash"

Chitranjan Kumar | February 8, 2021 | Updated 23:44 IST
Bitcoin crosses $44,000 mark on $1.5 billion boost from Tesla
Elon Musk-led Tesla invested $1.5 billion in Bitcoin

Bitcoin breached the $44,000 mark for the first time on Monday after Tesla revealed that it had invested around $1.5 billion in the cryptocurrency last month. The digital currency surged over 15 per cent after Elon Musk-led electric car manufacturer said that it is expected to begin accepting payment for its cars and other products with it in the near future.

Boosted by Tesla's announcement, Bitcoin jumped 15 per cent to hit an all-time high of $44,141 on Monday.

In a filing with the Securities and Exchange Commission (SEC), Tesla on Monday announced that it purchased $1.5 billion worth of Bitcoin for "more flexibility to further diversify and maximise returns on its cash." The company said that the decision was approved by the audit committee of its board of directors.  

As per the company, it may acquire and hold digital assets from time to time or long-term and that it will accept Bitcoin as payment for products "subject to applicable laws and initially on a limited basis."

Also read: Elon Musk says Bitcoin 'on verge of acceptance'; here's how Twitter reacted

The development came ten days after its chief executive Elon Musk encouraged investors to buy Bitcoin by adding a "#bitcoin" tag on his Twitter profile page. He had said that Bitcoin was "on the verge" of being more widely accepted among investors.

The investment by big companies like Tesla is a major boost for the cryptocurrency market as it is an indication that the digital current is being considered as an investment option. In the last few months, the cryptocurrency has witnessed surge in demand from larger investors, such as companies and businesses, as it has become an attractive investment alternative owing to higher returns. 

Also read: India plans to bring law to ban cryptocurrencies, introduce official digital currency 

Bitcoin's strong rally in the recent past was fuelled by massive demand from globally renowned investors and institutions, who put their weight behind this highly volatile digital currency amid unprecedented economic and geopolitical uncertainty caused by the COVID-19 pandemic.  

Launched in 2009, the price of one Bitcoin remained in the neighbourhood of a few dollars for the first few years, before surging to $19,783 in late-2017 and further to $40,000 levels in 2021. 

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