WATCH: Tesla buys $1.5bn of bitcoin

Bitcoin’s (BTC-USD) price hit a new record Monday, surging almost 16% in the afternoon and crossing $44,000, amid news that Tesla (TSLA) invested $1.5bn (£1.1bn) in the cryptocurrency, and may even start accepting it as payment for its products.

In a filing with the SEC, Tesla said it has “invested an aggregate $1.5bn in bitcoin,” and “may acquire and hold digital assets from time to time or long-term.”

It added that it expects to “begin accepting bitcoin as a form of payment for [its] products in the near future, subject to applicable laws and initially on a limited basis, which [it] may or may not liquidate upon receipt.”

Simon Peters, cryptoasset analyst at multi-asset investment platform eToro, noted that “if there were any doubters as to the mainstream acceptance of bitcoin, this surely must mark the end of any scepticism. Multiple other brands already accept bitcoin as payment, and we would imagine that, in time, other major companies will follow Tesla's example.”

“The world is moving online more and more and bitcoin sits at the heart of online transactions, and with this kind of endorsement from a multi-billion dollar company, it's likely the price will hit $50,000 by the end of the week,” he added.

A note by Wedbush Securities said the move by Tesla could be “a potential game changing move for the use of bitcoin from a transactional perspective.”

Previously, tweets by Tesla CEO Elon Musk have fuelled the bitcoin price.

The move “highlights the power that Elon Musk has in shaping price action and moving markets. He’s now putting his money (shareholders’) where his mouth is,” noted Neil WIlson, chief market analyst for Markets.com.

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However, he added that given Musk’s comments in support of bitcoin and adding #Bitcoin to his Twitter bio on 29 January “raises a real question about possible market manipulation. Musk’s tweeting record is chequered to say the least and he has had his knuckles rapped by the SEC in the past.”

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He said that the move “will also raise questions for fund managers who may not want to invest in a company with this kind of risk on its balance sheet – we know bitcoin is very volatile – this is normal FX risk x100. Tesla is now starting to take on big FX risk – this may not worry a lot of investors, but some conservative types might be concerned.”

Meanwhile, the price of dogecoin (DOGE-USD) has also surged in recent weeks after Musk began tweeting about it. The rise has coincided with a surge of populism in financial markets around the world.