CryptocurrencyInvestingBanksReal Estate

Bitcoin price smashes $44,000 as market reacts to Tesla purchase

February 8, 2021, 4:53 PM UTC

The price of Bitcoin hit a new all-time high on Monday as investors reacted to news that Tesla had purchased $1.5 million of the cryptocurrency, and that the car maker planned to accept it as payment.

Shortly after the news broke, Bitcoin crossed the $44,000 mark for the first time. The milestone comes on the heels of an extraordinary run for Bitcoin, which has doubled in price since December, and has recovered from a tumble in late January that saw it briefly fall to around $30,000.

The Tesla news also set off a flurry of reactions on Twitter as market watchers tried to digest the implications of one of the world’s most valuable companies betting on Bitcoin—and of its charismatic CEO Elon Musk embracing the crypto industry.

Katie Haun, a crypto expert at VC firm Andreessen Horowitz, predicted Tesla’s move could be just the beginning as more firms follow its example, and that of fintech giant Square, by adding Bitcoin to their balance sheet:

Meanwhile, banking giant RBC also raised such a possibility—suggesting that the world’s most valuable company could soon make a big foray into crypto:

Others on Twitter noted that Monday’s news came as the culmination of Musk dropping weeks of cryptic hints that he was poised to embrace cryptocurrency—hints that included references to a novelty currency called DogeCoin whose value Musk helped inflate:

Others simply marveled about the size of the bet Musk had placed on Bitcoin:

There was also ample speculation Tesla’s strategic reasons for moving into Bitcoin. One popular theory is the company is counting on the price continuing to climb, and that accepting it as payment could pad its balance sheet in the long term.

Tesla’s foray into Bitcoin also produced a debate about whether it was hypocritical of Musk—a proponent of clean energy—to support a cryptocurrency that takes an enormous amount of energy to maintain:

Finally, many in the meme-centered world of cryptocurrency chose to forego in any serious analysis and simply delight in the fact one of the world’s most prominent CEOs had decided to embrace Bitcoin: