After the automaker announced a USD 1.5 billion (approximately Rs 10,930 crore) investment in digital currency and plans to accept cryptocurrency from customers who purchase its electric cars, Tesla pushed Bitcoin to a record high.

The announcement follows the shameless Tesla CEO Elon Musk’s brazen social media embrace of Bitcoin, marking the latest step in the mainstreaming of cryptocurrencies.

The value of Bitcoin has risen by about 50% this year, but skeptics say it is still highly volatile, and regulators warn that it is vulnerable to illegal use.

Musk is an expert in disrupting company norms and economic structure. Last week, he briefly changed his Twitter resume to simply read “#bitcoin”.

In recent days, he has also joined social media to promote Dogecoin, another digital currency that was initially joking, but has become more and more valuable.

Tesla stated in a securities document that the purchase of Bitcoin was to increase the company’s liquidity.

In announcing the purchase of Bitcoin for 1.5 billion U.S. dollars (approximately Rs 10,930 crore), Tesla said: “In January 2021, we updated our investment policy to provide us with greater flexibility to further diversify cash and Maximize cash returns.”

The result is “We may invest some of this cash in certain alternative reserve assets, including digital assets, gold bars, gold exchange traded funds and other assets designated in the future.”

The company added that Tesla will also “start accepting Bitcoin as a payment method for our products in the near future.”

At around 13:25 GMT (IST: 6:55pm), the price of Bitcoin soared to $44,795.20 (approximately Rs 3.26 lakh).

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Tesla’s move further institutionalized Bitcoin as a means of value recognized in American and global businesses.

In October, Paypal announced that it would allow consumers to conduct transactions in cryptocurrency, and the payment company Square said it would invest US$50 million (about Rs 36.5 billion) in Bitcoin.

Just last month, asset management giant BlackRock announced that its two funds may include investments in Bitcoin

Despite this, BlackRock CEO Larry Fink also expressed caution about Bitcoin and pointed out that Bitcoin is still highly volatile.

Tesla also admitted in the U.S. Securities and Exchange Commission (SEC) documents that digital assets “may continue to be very unstable” and are vulnerable to attacks based on “malicious” technology.

The new Treasury Secretary Janet Yellen stated at the Senate confirmation hearing that cryptocurrencies are vulnerable to illegal financing.

Increased legality
Since March 2020, Bitcoin is only $5,000 (about 360,000 rupees), which is only 12 years old.

ThinkMarkets analyst Fawad Razaqzada said: “This may be one of the biggest developments in the cryptocurrency industry.”

“Tesla will become a major player in the automotive industry. If it starts to accept Bitcoin as a payment method, it will make digital currency more legal.”

Neil Wilson, chief market analyst at, said that Tesla’s announcement may cause Bitcoin to rise above US$50,000 (about 3.64 million rupees). This is due to Musk’s “influencing price trends and Promote the impact of market trends.

But Musk’s position on Bitcoin raises “a real question about possible market manipulation,” depending on when Tesla purchased Bitcoin when it made a statement online.

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Wilson said: “This may not worry many investors, but it may worry about some conservative types.” “Tesla’s move is the kind of large company support that bulls are grabbing: more company support = more Mainstreaming.”

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