Bitcoin hit a fresh record Tuesday, surging above $48,000 for the first time following Tesla’s (TSLA) - Get Report disclosure that it has made a $1.5 billion investment in the world's largest cryptocurrency.
Bitcoin traded as high as $48,226, according to CoinDesk, before paring gains. At last check it was at $46,298, up 6.5%. Other cryptocurrencies were also trading higher; Ethererum was up 2.23% at $1,741.90, while XRP was up 3.,12% at 46 cents.
In a regulatory filing on Monday, Tesla said it would begin accepting bitcoin as a form of payment for its electric cars - a move widely seen as an endorsement of the cryptocurrency by a mainstream company and a step toward corporate adoption.
Tesla CEO Elon Musk has for weeks been commenting about digital coins, most recently about Dogecoin, an open-source cryptocurrency started in 2013 as a joke based on a popular meme featuring a Shiba Inu dog, that sent that the cryptocurrency to a record high on Monday.
Bitcoin is designed to have a fixed supply of 21 million coins, underpinned by a blockchain-based digital ledger distributed across computer networks. It has more than quadrupled in value over the past 12 months amid strong demand from institutional asset managers including pension funds - and now companies.
At the same time, bitcoin’s stunning ascent has also raised concerns about a bubble – chiefly because there remains little agreement on exactly what gives bitcoin and other digital currencies their underlying value, other than what someone is willing to pay.
For his part, TheStreet's Jim Cramer believes Tesla is once again ahead of the game and has "absolutely" made the right decision in buying bitcoin.
"I've always felt companies should do more with their cash than keeping it in short-term," Cramer said.
JPMorgan in early January predicted bitcoin could reach $146,000, though more as it becomes seen as a mainstream alternative to gold. Following Tesla's announcement Monday, Michael Novogratz, founder of crypto investment firm Galaxy Digital, said bitcoin may reach $100,000 by the end of the year.