Bitcoin jumped 5% after billionaire Elon Musk announced Tesla will accept the digital asset as payment.
Musk said bitcoin payments made to Tesla will not be converted to fiat currency.
The option to pay in bitcoin will be made available to non-US customers later in 2021, he said.
Chief Executive Officer Elon Musk on Wednesday wrote on Twitter that "you can now buy Tesla with Bitcoin" and that payment by Bitcoin will also be available to customers outside the United States later this year. He also added that Tesla will only use internal and open source software and that any Bitcoin paid to the company will be kept as Bitcoin and can be converted into fiat currency.
California-based Tesla unveiled its $ 1.5 billion investment in Bitcoin in February and signed off its initial goal of accepting cryptocurrency as a payment method at the time, sending prices to the record. The world’s leading EV maker made a bet on Bitcoin after reviewing its investment policy in January to allow it to buy digital assets.
Bitcoin rose 3.7% to $ 56,442 from 7:22 a.m. New York.
Tesla's adoption of cryptocurrency fuels the controversy that long-term investors such as corporate investors, family offices and insurers will demand the availability of a digital token. While prominent Wall Street figures have come out to support Bitcoin, there are major challenges for any companies following that by adding visible coins to balance sheets.
"Tesla and other companies are showing that crypto will remain, and its general adoption will only increase," said Simon Peters, an analyst at Investment platform eToro.
In addition to the loan enhancing the legitimacy of electronic money, Musk's acceptance of Bitcoin fits his image of maverick. The billionaire often tweets about cryptocurrency-related topics and recently called Bitcoin a "good thing" in interviews. Dogecoin, a former digital currency, also stepped up its record-breaking record in February after Musk, rapper Snoop Dogg and George's bassist George wrote about it.
Musk published his tweet soon after Twitter users noticed the updated bitcoin support for all models of Tesla's cars across online US stores. "Elon," "Tesla," and "#Bitcoin," quickly became trending hashtags on the social media platform.
The price of bitcoin rose 4.7% to $56,360 around 4:20 a.m. ET. It is up 90% year-to-date and more than 800% in the last 12 months.