In short
- Tesla was reported to have bought $ 1.5 billion in Bitcoin.
- The price went up from about $ 39,000 to over $ 47,000 in the next 12 hours.
- It is an all-time high.
The price of Bitcoin today reached just over $ 47,000, a new record for the world’s largest cryptocurrency. Its market capitalization is currently around $ 855 million – about $ 40 million more than the value of all Tesla shares.
Speaking of Tesla, the electric car maker played a huge role in today’s production Bitcoin price increase. Earlier in the morning in the U.S. trades, Bitcoin was being sold for about $ 39,000, about $ 3,000 below its previous record.
Then came the news that Tesla had bought $ 1.5 billion in Bitcoin. In an hour, the price changed from $ 4,000, according to data from CoinMarketCap. After stalling for a few hours, it continued to rise, hitting unprecedented barriers of $ 44,000, $ 45,000, $ 46,000 and (soon) $ 47,000.
This means that Tesla’s holdings in BTC increased by several hundred million in less than 24 hours – not a bad return. It also means that a price close to $ 50,000 – apparently implausible a few months ago – is within reach.
Tesla is not the first company to put Bitcoin in its books. MicroStrategy, a business intelligence company led by prosecutor BTC Michael Saylor, spent $ 1.15 billion to buy Bitcoin, even selling securitized debt to buy more digital assets. As of today, its 71,079 BTC is worth about $ 3.2 billion.
MicroStrategy’s aggressive strategy has been credited with helping to boost the Bitcoin 2020-21 bull run, paving the way for other companies. Square, the payments company run by Twitter CEO Jack Dorsey, for example, bought 4,709 Bitcoin for $ 50 million in early October, when the coin cost about $ 10,600. Bitcoin’s price has more than quadrupled since then.
Tesla, on the other hand, bought near the peak of the market – a sign of confidence that there is still plenty of room for bulls to run, especially if big-cap companies follow suit.
They may be considering this. An analyst at RBC Capital Markets, the investment arm of the Royal Bank of Canada, suggested today that the software and hardware company Apple should buy cryptocurrency and keep it in reserve while developing its Apple Wallet on a stock exchange that can compete with Coinbase.
Mitch Steves wrote that a $ 1 billion investment from Apple would be less than a week of cash flow, enough to leverage a portfolio and switch.
“The portfolio initiative appears to be a clear billion dollar opportunity for the company (potential for well over $ 40 billion in annual revenue from limited R&D),” he wrote, as reported by Bloomberg.
And they are not just companies. Miami Mayor Francis Suarez, who wants to make the city of Florida a global crypto center, announced this morning that he is working on a resolution to invest municipal funds in Bitcoin.
He plans to meet with the city commission on Thursday to “get the ball rolling.”
Better hurry up, Mr. Mayor. The price is rising faster than the tide in South Beach.
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