Bitcoin Blasts Above $44,000 After Elon Musk’s Tesla Buys $1.5 Billion

Elon Musk, Bitcoin in the background
Elon Musk, Bitcoin in the background

After struggling for one month, Bitcoin (BTC) has finally soared to a new all-time high. The largest cryptocurrency reached $44,000 on Monday — when Tesla (NASDAQ: TSLA) revealed that they bought $1.5 billion worth of Bitcoin. The digital token’s previous record was $41,950.

According to a filing with the Securities and Exchange Commission (SEC) on Monday — Tesla announced that it bought $1.5 billion worth of BTC. Furthermore, the electric vehicles manufacturer said it bought BTC for “more flexibility to further diversify and maximize returns on our cash”.

Following the news, the cryptocurrency soared 15% on Monday, and Bitcoin’s market capitalization reached an astonishing $816,004,948 — surpassing both Facebook (NASDAQ: FB) and Tesla. The company added that they may invest more in cryptocurrencies in the future. That being said, Tesla is the first automaker to accept BTC as payment.

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In recent tweets, Elon Musk CEO of Tesla endorsed both BTC and Dogecoin. Musk added Bitcoin to his Twitter bio on January 29 — pushing the cryptocurrency’s price 20% higher. Additionally, Musk sent “Dogecoin to the moon” on Sunday, following a poll he published on Twitter. The recent moves by Musk may suggest that he is gaining more interest in cryptocurrencies.

Bitcoin is Becoming Widely Accepted

Bitcoin has been on a rally since December. The cryptocurrency surged to a record-breaking $40,000 in January. However, the rally was disrupted on January 10, and the digital token suffered a 30% correction. Since then, Bitcoin has been struggling in a $30,000 resistance range. Still, with Tesla endorsing Bitcoin, the worst may finally be over.

With Musk’s Tesla accepting the cryptocurrency — Bitcoin is gaining the attention it needs to thrive. Last year, Paypal, Fidelity Investments and Square, accepted the digital asset. Consequently, the broader acceptance of the digital token drove more interest from financial institutions.

Ruffer Investment profited $750 million from Bitcoin in two months, meanwhile, Guggenheim filed with the SEC to buy $500 million worth of Bitcoin. Additionally, billionaire Chamath Palihapitiya, Paul Tudor Jones, and Stanley Druckenmiller endorsed the digital currency. On Sunday, Ricardo Salinas Pliego — 3rd richest person in Mexico added Bitcoin to his Twitter profile.

Michaël van de Poppe, a cryptocurrency analyst said that Bitcoin can reach $50,000 if it breaks the next level of resistance. Michaël said in a tweet Saturday, “#Bitcoin reached the next area of resistance and final hurdle before new ATH’s. $35,000 was the crucial area and it broke, therefore, we’re at the next level of resistance. Breaking this and I think $50,000 is on the horizon.”

Altcoins suffer as BTC recovers

In conjunction with the BTC all-time-high record, several altcoins are suffering from heavy corrections. One reason can be that traders are shifting from altcoins into Bitcoin again as the cryptocurrency can soon hit the $50,000 mark. That being said, other altcoins might experience heavier corrections, if the BTC rally continues to breaking a new record,

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence said in the February 2021 edition of Bloomberg’s Crypto Outlook report:

“Bitcoin’s price-discovery stage points to the next threshold vs. gold, around 100x an ounce, as its upward trajectory has legs. The benchmark crypto was initially capped at 1x until 2017. Then 10x until December as the dichotomy between the Bitcoin haves and have-nots quickly narrows.”

“Absent a major technology glitch, old-guard gold allocators are primarily at risk if the crypto becomes a reserve asset and Bitcoin as 1-5% of one’s investable assets becomes increasingly prudent. About $30,000 is Bitcoin’s support level vs. $50,000 initial target resistance. The broader crypto market is more speculative and increasingly subject to Bitcoin,” he added.