Bitcoin Goes on a Tear after Elon Musk invests $1.5 billion

Bitcoin made record highs today after Elon Musk, the CEO of Tesla, announced that his company had taken $1.5 billion of its cash and invested it in the cryptocurrency. There was extensive coverage of this move in the financial press because of its sheer significance.

In making the move, Musk also announced that Tesla would soon begin accepting Bitcoin as payment for its cars.

This major development is a continuation of the acceptance of Bitcoin as a digital currency. Michael Saylor, the CEO of Microstrategy, is credited with encouraging Elon Musk to make this move. In an interview on Bloomberg TV, Saylor called Bitcoin “digital gold.” and said the earnings power of Bitcoin far outstrips dollar based and gold based investments and said that Bitcoin is the only investment that will ensure the preservation of purchasing power as the dollar continues to be diluted by ongoing needs for fiscal stimulus.

Will today’s events be the new jump off point for a continuing rally in Bitcoin? It’s hard to say but with Bitcoin jumping 20% today to a level near $47,000, the positive momentum is hard to dismiss.