Bitcoin hits record on Tesla’s $1.5b bet

Bitcoin prices hit a record high on Tuesday, as US electric vehicle maker Tesla unveiled it had purchased $1.5 billion in bitcoin.

Bitcoin prices inched closer to 50 million won ($44,800) each in Korean exchanges on Tuesday, while exceeding that threshold in overseas exchanges. Bitcoin in South Korean exchanges were being traded at a discount of more than 3 percent on Tuesday, due to different market environments such as regulations and trading volume. 

In its latest annual report Monday, Tesla said it had obtained bitcoin in January as part of ways to diversify and maximize returns on cash holdings.

Tesla also said that it expects to accept the digital coin as payment for its products.

Bitcoin prices jumped almost 20 percent following the news. The company’s decision followed founder and CEO Elon Musk’s promotion of digital currencies on his Twitter account earlier this year. Musk had added #bitcoin to his Twitter biography, which pushed up prices, before removing the hashtag later.

Bitcoin, the largest digital coin with a market cap over $864 billion as of Tuesday, traded at more than 49 million won each in afternoon trading, according to Upbit, the largest digital currency exchange in South Korea. This compares with prices in January, which were as low as 31.66 million won.

Meanwhile, the fear and greed index of digital assets developed by Dunamu, the operator of Upbit, stood at 86.19 as of 1 p.m. on Tuesday, indicating a heavy greed sentiment in the market.

By Park Ga-young (gypark@heraldcorp.com)