Bitcoin extends gains above $47,000 in Asia

SINGAPORE: Cryptocurrencies extended gains in Asia on Tuesday, with bitcoin and ethereum reaching record highs, in the wake of a Tesla Inc investment in bitcoin.

Bitcoin posted its largest daily percentage gain in more than three years overnight, after Tesla made the announcement in its 2020 annual report.

Bitcoin added as much as 2.5% to hit a record high of $47,565.86 on Tuesday and has gained 61% for the year so far. Ethereum hit a record of $1,784.

Tesla had said on Monday it had invested around $1.5 billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a more than 10% jump in the electronic currency.

Analysts said the move by one of the world’s best-known companies was liable to prove a game changer for bitcoin.

A well-known supporter of bitcoin, Chief Executive Officer Elon Musk has been weighing in regularly over the past week to a frenzy in retail investment, also driving up shares in meme-based digital currency dogecoin and shares of U.S. video game chain GameStop

Bitcoin, which has set new record highs in recent months after a rollercoaster ride over the past decade, has also drawn support from major financial institutions this year. The world’s biggest money manager Blackrock recently changed a handful of investment mandates to allow some of its funds to invest in the currency.

Central banks remain sceptical of digital currencies, but analysts say the more real world uses appear for bitcoin, the more attractive it will prove as a long term store of value.

Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash.

It said it had invested an aggregate $1.5 billion in bitcoin under the changed policy and could “acquire and hold digital assets from time to time or long-term”.

Musk has also endorsed other crypto currencies in the recent past. He gave dogecoin, the coin based on a popular internet meme, a shoutout on Twitter last week sending its price to record highs over the weekend.

Late on Sunday, in a fresh endorsement for the cypto currency, Musk tweeted “Who let the Doge Out” — mimicking lines from the famous song by Baha Men from the year 2000.

The coin has also received attention from California rapper Snoop Dogg by putting up an image of a dog tagged “Snoop Doge” on his Twitter timeline.

Dogecoin was created largely as a satirical critique of the 2013 crypto frenzy and is not taken as seriously as bitcoin or ethereum. It almost doubled since Friday hitting a record $0.0871, according to data on blockchain and cryptocurrency website Coindesk.