Tesla buys cryptocurrency: Elon Musk sends bitcoin price soaring


US electric car maker Tesla is now betting big on the cryptocurrency Bitcoin. Group CEO Elon Musk’s company has announced it has invested $1.5 billion in the digital currency. The announcement sent the Bitcoin price soaring to more than $43,000 within minutes.

Musk had already made his stance on the currency clear a few days ago: In his Twitter profile, he succinctly wrote #bitcoin.

The value of bitcoin had risen sharply in recent months – already at the beginning of January, it had temporarily climbed to more than 40,000 dollars, but then fell sharply again in some cases.

One important reason for the upswing in recent months was the announcement by the payment service Paypal in the fall that it would allow account holders to use cryptocurrency.

Behind bitcoin is the idea of a currency that exists independently of states, central banks and monetary policy. Unlike classic currencies, digital means of payment are not controlled by a state central bank, and bookings do not have to be confirmed by a central office.

The first Bitcoin was traded in 2009. The currency is issued and managed by its users themselves, so there is no Bitcoin central bank. Instead, all transactions are documented in a common database – this is the so-called blockchain. New Bitcoins are created through complicated arithmetic operations, and the amount of money is limited to a maximum of around 21 million coins.

A limited supply therefore meets a growing demand: After Bitcoin had long eked out a niche existence, institutional investors are increasingly interested in the cryptocurrency. Analysts at the American investment bank JPMorgan Chase recently drew a comparison with gold, which for many investors represents classic crisis insurance. However, the price of the Bitcoin is considered extremely susceptible to fluctuations. In March of last year, one Bitcoin could be bought for less than $4,000 at times.


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