Bitcoin hit a fresh record above $47,000 on Tuesday after Tesla Inc’s announcement of a $1.5 billion investment in the largest cryptocurrency. The token rose as much as 6.3% to almost $47,493 in early Asian trading before paring some of the gains. Tesla’s disclosure Monday sent the price soaring.
The company also said it would begin accepting the digital token as a form of payment for its electric cars. The developments amounted to the biggest endorsement of the controversial cryptocurrency by a mainstream firm. Elon Musk, Tesla’s founder and the world’s richest man, has for months been commenting about Bitcoin, buffeting its price.
Bitcoin’s journey to its latest summit came with big swings that continue to stoke controversy about its outlook. Predictions for its possible long-term price range from $400,000 and more to zero.
Proponents cite backing from the likes of Musk and signs of interest from long-term investors as evidence of a durable rally. They also envisage a role for the token as a hedge for risks such as faster inflation, akin to gold. Others continue to see speculators at work and are reminded of the 2017 boom that turned to bust. The token is designed to have a fixed supply of 21 million coins, underpinned by a digital ledger distributed across computer networks.
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