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Tesla drives Bitcoin to a New High of $47K

The world’s largest cryptocurrency by market capitalization, bitcoin has rallied to an all time high blowing past $45,000, $46,000 and $47,000 in less than an hour on Monday evening, driven by Tesla’s announcement that it had bought $1.5 billion of bitcoin.

The electric vehicle maker said Monday in an annual report filed with the U.S. Securities and Exchange Commission that it has put an aggregate $1.5 billion into bitcoin under a new investment policy and that the company may “acquire and hold digital assets from time to time or long term.”

After Tesla’s disclosure, the cryptocurrency shot to $ 44,801. However, a combination of traders in Asia shot the bitcoin prices higher after the announcement to $ $47,513.57, a new all-time high, before settling back to $47,053.09, up 20.6% in the last 24 hours.

However, while those may be the major factors that affected the price of bitcoin, they are not the only factors. A growing number of big institutional investors have also contributed to the rise including Paul Tudor Jones II and Bill Miller, as the Federal Reserve and central banks around the world invest trillions of dollars of freshly created money into financial markets so as to aid in recovery of their economies.

As more institutional investors like Tesla are buying the cryptocurrency and holding it for the long term, bitcoin’s liquid supply is continuing to decline as currently, around 78% of issued bitcoin are either lost or being held. Leaving less than 4 million bitcoin to be shared amongst future market investors.

Read also: World’s Largest Asset Manager Allows Two of its Funds to Invest in Bitcoin Futures