Another Bitcoin Surge After Tesla Investment

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Ah, the Elon Musk effect strikes again. Tesla's $1.5 billion investment just led to Bitcoin doubling its value to above $40,000. This whopping increase comes not even a month after Bitcoin reached $20,000 for the first time ever. Bitcoin, which relies on blockchain technology, is the most recognizable name in virtual assets since its inception 12 years ago. 

Bitcoin's recent steep upward climb has much to do with Musk, who has recently trained his influential eye on the cryptocurrency.

Bitcoin's latest rally, ongoing since October, has seen the digital asset hitting new highs regularly. Musk's love affair with Bitcoin can be directly linked to this rally. The prolific godfather of tech innovation has a proven ability to move mountains and markets with a few keystrokes here, a meme there and a constant dispersal of  tweets designed to direct action, disrupt and innovate. Bitcoin, known for its industry-disrupting qualities and upward mobility, gets the Musk effect from all angles, benefiting not only from Musk's meme effect but also from Tesla's direct acquisition of $1.5 million in Bitcoin.

Experts expect Bitcoin to reach $50,000 soon after Tesla filed its annual 10-K report, which detailed the bitcoin investment along with plans in motion to begin accepting bitcoin as a valid form of payment. The report reads as follows:

"We invested an aggregate $1.5 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt."

This vote of confidence from Musk and Tesla, along with ever-intensifying institutional attention and the U.S. dollar's decline in foreign markets, has analysts thinking Bitcoin could continue to reach higher and higher heights before we see a crash. Bitcoin is also becoming more legitimized and accessible every day, with big players like PayPal enabling purchases of the crypto coin. ByteTree, a digital asset firm, noted that Bitcoin purchase was in the realm of $600, the exact size of the most recent pandemic aid stimulus check, meaning more consumers are buying into virtual assets, especially Bitcoin.

While Bitcoin has always been and will likely remain volatile, experts generally agree that the factors discussed above will keep Bitcoin above $20,000, even while experiencing market corrections, regulator pushback and the now-expected crashes and dips that mark cryptocurrency. 

See also: Is Bitcoin a Good Investment? 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.