Elon Musk-owned Tesla Inc. on Monday announced it has invested $1.50 billion in bitcoin, which led to a rapid surge in the cryptocurrency's market value. Tesla, in a filing with the Security and Exchange Commission (SEC), also added that it will soon begin accepting bitcoin as a form of payment for its products, which also contributed to the massive rise in the stock prices of bitcoin. Tesla said it is investing in digital assets to provide more flexibility to further diversify and maximize returns on cash.
Earlier this month, Musk himself helped in the surge of bitcoin's market value after he tweeted how investing in cryptocurrency is not a bad idea. Musk particularly mentioned Dogecoin in his tweet, a cryptocurrency that started as a joke in 2013 and values at $6.3 billion. Musk's tweet boosted Dogecoin's stock market value by almost 50% as it rose by three cents. Last month, when Musk changed his Twitter biography to just '#bitcoin', the stocks of the cryptocurrency jumped as much as 20 percent.
Bitcoin is a cryptocurrency, which is also known as a digital currency and is traded entirely on the web. Bitcoin was invented in 2009 by an unknown person or persons and has no single administration to control it, unlike physical currencies, which are controlled by central banks all over the world. Bitcoin has become hugely popular among the masses in the last couple of years, before which it was only known by a select group of people.
The surge in bitcoin's popularity is also attributed to its success in the stock market, which has skyrocketed in recent years. Just last week, bitcoin was trading at around Rs. 27,00,000 per coin, while as of February 9 it values at nearly Rs. 35,00,000 per coin. As of May 2020, there were over 18 million bitcoin circulating the market. Several economists criticise bitcoin over its vulnerabilities, such as rapid fall in value, cyber hack, its use by criminal organisations because of anonymity, etc.
However, despite shortcomings in the past decade, bitcoin's global acceptance is growing and it holds the potential of becoming the next big thing. Apart from Tesla, several other companies have invested in bitcoin, including MicroStrategy, which last month announced it will continue to buy bitcoin and currently has cryptocurrency worth $2.38 billion. According to reports, the Swiss province of Zug will soon start accepting bitcoin as a form of payment for taxes.