Tesla investor Ron Baron told CNBC on Monday that he is not surprised by the electric car maker’s purchase of bitcoins, but warned that he wants to further explore the decision-making process before making a judgment.
Tesla announced in a filing on Monday to the Securities and Exchange Commission that it bought $ 1.5 billion in bitcoins and plans to start accepting that the cryptocurrency has payment for its products.
Tesla CEO Elon Musk “commented favorably on bitcoin for a while, then the bitcoin ad [is] it’s not surprising, “Baron told co-host” Squawk Box “Becky Quick.
Baron has been optimistic about Tesla for years and his investment company of the same name, Baron Capital, holds a significant stake in the electric vehicle manufacturer.
“I’m sure a lot of thought has been devoted to Tesla’s purchase of bitcoin and I’m looking forward to learning the reason,” added the billionaire investor in his comments to Quick, who read them during the broadcast.
Bitcoin’s price soared to a new record on Monday after Tesla’s purchase went public, surpassing $ 44,000 per coin by one point.
Tesla’s shares rose more than 1% at the start of Monday’s trading session. The stock has been on the rise for the past 12 months, up almost 470% from Friday’s closing price of $ 852.23.
Bitcoin’s sharp price increase last year coincided with several high-profile investors publicizing the cryptocurrency. Paul Tudor Jones, for example, said he believes bitcoin is a strong hedge against inflation. Established fintech firms, such as PayPal, have also made entries into the crypto space, and some believe that institutional adoption was a factor in bitcoin’s recovery.
In his comments to CNBC, Baron pointed to the movements of “serious investors” like Jones and companies like PayPal, saying that he should have recognized them earlier as possible heralds for further bitcoin adoption.
Baron also cited Ark Invest founder and CEO Cathie Wood, a Tesla uber-bull colleague, as a supporter of bitcoin. Wood’s company is also a majority shareholder of Tesla. It has a price target of $ 7,000 per share for the electric car maker to reach by the end of 2024. In February 2018, Wood boldly predicted that Tesla’s shares would go up to $ 4,000 each. Adjusted by division, this forecast was fulfilled last month.
In June, Baron told CNBC that he believed “there is 10 times more to go” on the positive side of Tesla’s shares. Since then, the stock has exploded and made nearly half of those gains in less than eight months. Tesla in August executed a 5 to 1 stock split. Since then, the stock has skyrocketed. Then, in October, Baron said he believed Tesla would eventually become a $ 2 trillion company. As of Monday, Tesla’s market capitalization was just over $ 800 billion.