Tesla invests in bitcoin
Tesla, the stalwart electric car manufacturer, revealed on Monday that it had bought$1.5bn (£1.1bn) in bitcoin and said it might soon accept payment in the popular but controversial cryptocurrency.
The news of Tesla’s investment in bitcoin has sent the digital currency soaring 14% to a record high of a 300% increase on this time last year as cryptocurrency investment has moved into the mainstream as global interest rates remain at record lows.
Tesla disclosed the bitcoin holding in a filing with the US Securities and ExchangeCommission on Monday. The company said that they.
The company said that it had “updated our investment policy to provide us with more flexibility to diversify further and maximize returns” to allow it to invest cash reserve in “alternative reserve assets including digital assets.”
Bitcoin, commonly known as BTC, is an online payment system launched as open-source software in 2009. The identity of the creator or creators who generated this technology is still a mystery that goes by the name Satoshi Nakamoto.
Nakamoto published a paper describing his or her creation entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008.
Bitcoin is a type of cryptocurrency. There are no concrete bitcoins and only balances kept on a public ledger that everyone has sheer access to. Unlike fiat currency, bitcoin is created, distributed, traded, and stored using a decentralized ledger system known as a blockchain.
A massive amount of computing power verifies all bitcoin transactions.
Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity.
Despite it not being legal tender, Bitcoin is very popular and has triggered hundreds of other cryptocurrencies, collectively referred to as altcoins.
Why Bitcoin and other cryptocurrencies are becoming so popular?
The foremost reason behind the soaring value of bitcoin is its pervasive usage across the world. Today, many businesses and individuals have started using bitcoin as a payment mode instead of traditional currencies.
Since bitcoin is not dependent upon any central authority or banks, there are no intermediaries. So that itself, the user doesn’t have to pay the transaction fee when compared to the traditional currencies.
The other primary reason that draws the investors’ attention to bitcoin is that bitcoin is digital, which is quietly captivating to traders and investors. Usually, banks charge huge pays as transaction fees from both the sender and receiver and take several days to complete the transaction while transferring funds through banks internationally.
While Bitcoin appears to be a prevalent virtual currency system, there are still no uniform international laws that oversee Bitcoin. Hence the bitcoin market is highly volatile, and it behaves according to demand and supply. Various uncertainties related to the legitimacy of bitcoin are the reason for the volatile market of bitcoin.
Despite its volatile market, bitcoin has a significant impact on businesses and is supposed to become the most popular cryptocurrency.
After many years of volatility, Bitcoin hits a new high in recent months, plus Tesla’s move to invest significantly in bitcoin has accelerated its jump. By looking at the present growth rate and Bitcoin value, bitcoin’s value may rise with more retailers and businesses accepting it as a payment opinion.