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Bitcoin jumps as Tesla buys $1.5bn of currency

Elon Musk's car firm Tesla has said it bought around $1.5bn (£1.1bn) of the cryptocurrency Bitcoin in January, and expects to start accepting it as payment in future.

The news caused the price of Bitcoin to jump 14% to $43,968, a record high.

Tesla said it wanted to maximise its returns on reserve cash, not being used in day-to-day running of the company.

It comes days after Mr Musk drove up the price of Bitcoin by adding "#bitcoin" to his Twitter profile page.

He removed it days later but has continued talking up Bitcoin and other cryptocurrencies, including dogecoin, which jumped 50% after his endorsement.

In a stock market filing, Tesla said it had "updated its investment policy" and had been looking to invest in "reserve assets" such as digital currencies, gold bullion or gold exchange-traded funds.

It said it had then bought $1.5bn of Bitcoin and could "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," it said.

Mr Musk said a week ago in a tweet that Bitcoin was "on the verge" of being more widely accepted among investors.

Analysts said the move by Tesla was liable to prove a game changer for the currency.

"I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move," said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.

"One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well."



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