Electric car maker Tesla has purchased $US1.5 billion ($A2.0 billion) in Bitcoin and announced that it would begin accepting it as payment for its products in the near future, prompting a spike in the cryptocurrency.
Subscribe now for unlimited access.
or signup to continue reading
The announcement bumped the price of Bitcoin up more than 12 per cent on Monday to a record-high of more than $US43,650 on Monday.
Analysts said the move by one of the world's best-known companies was liable to prove a game changer for Bitcoin.
Tesla boss Elon Musk has recently been weighing in to a frenzy in retail investment, which has also driven up shares in digital currency Dogecoin and shares of US video game chain GameStop.
Musk said a week ago that Bitcoin was "on the verge" of being more widely accepted among investors and in December asked if it was possible to do large transactions in the currency.
"I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move," said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.
"One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla has exposure to it as well."
Bitcoin, which has set new record highs in recent months after a rollercoaster ride over the past decade, has also drawn support from major financial institutions this year.
The world's biggest money manager Blackrock recently changed a handful of investment mandates to allow some of its funds to invest in the currency.
Central banks remain sceptical of digital currencies, but analysts say the more real world uses appear for Bitcoin, the more attractive it will prove as a long term store of value.
Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximising its returns on cash.
It said it had invested an aggregate $US1.5 billion under the changed policy and could "acquire and hold digital assets from time to time or long-term".
Musk has also endorsed other crypto currencies in the recent past. He gave Dogecoin, the coin based on a popular internet meme, a shoutout on Twitter last week, sending its price to record highs over the weekend.
The coin has also received attention from California rapper Snoop Dogg by putting up an image of a dog tagged "Snoop Doge" on his Twitter timeline.
Australian Associated Press
