Bitcoin skyrockets to a new all-time high after Tesla invests $1.5 billion in the popular cryptocurrency

Elon Musk is the latest in a growing list of CEOs to become a bitcoin supporter.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla Inc (NASDAQ: TSLA) made a game-changing disclosure on Monday.

The electric-vehicle (EV) leader purchased $1.5 billion worth of bitcoin (CRYPTO: BTC) in a move that could bring legitimacy to the digital currency markets and pave the way for more companies to adopt the cryptoasset as a key part of their treasury-management strategies.

Other public companies have begun to convert some of their cash reserves into bitcoin in recent months. Up until today, MicroStrategy Incorporated (NASDAQ: MSTR) has led this charge. The business intelligence specialist has allocated more than $1 billion to bitcoin purchases since adopting the cryptocurrency as a primary treasury reserve asset in August. MicroStrategy's over 71,000 bitcoins are currently worth roughly $3 billion. 

Tesla's entry into the crypto arena is likely to accelerate this trend. Tesla's blockbuster bitcoin purchase could create "a safe zone for some of the smaller companies and possibly everyone in the S&P 500 Index (SP: .INX) to allocate into bitcoin," Antoni Trenchev, co-founder of crypto lender Nexo, said in January. 

Moreover, with $19.4 billion in cash reserves as of the end of 2020, Musk could choose to bolster Tesla's bitcoin holdings in the year ahead. The EV leader also said that it intends to begin accepting payments in bitcoin for its vehicles, subject to applicable laws. 

The Bitcoin price soared on the news to a record high above $44,000 before pulling back close to $43,000 as of 3:25 p.m. EST on Monday. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Joe Tenebruso has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends MicroStrategy. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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