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Bitcoin soars after Tesla invests $1.5B

Yahoo Finance's Dan Roberts joined Yahoo FInance Live to break down how Elon Musk has impacted the valuation of Bitcoin.

Video Transcript

SEANA SMITH: Tesla buying $1 and 1/2 billion worth of Bitcoin, sending the price of Bitcoin to a new record above 44,000 for the first time. We want to bring back in Dan Roberts for more on this. And Dan, we were talking last week. A lot of that, though, was more focused on Dogecoin when it came to Elon Musk, and there was lots of questions about how serious he was when it came to the crypto market. But this, of course, is a massive move not only for Tesla, but it's huge for the crypto industry as well.

DAN ROBERTS: That's right, Seana, and probably bigger for Bitcoin than it is for Tesla. You mentioned last week, when we were talking about Elon Musk tweeting about Dogecoin, the meme-based cryptocurrency, he cautioned in a live chat on Clubhouse that his tweets about Dogecoin are jokes.

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But this is no joke. I mean, this is really Musk getting serious about crypto. This is the biggest single buy of Bitcoin from a public company ever. Of course, MicroStrategy, which is also publicly traded, holds more Bitcoin than Tesla, but has done it in recurring buys over the course of time. Tesla doing this $1.5 billion worth in one swoop.

It's just so interesting. It also amounts to 10% of Tesla's cash reserves. And just to put that in perspective, you guys, remember when we discussed back in October how notable it was when Square bought $50 million worth of Bitcoin. That was just 1% of Square's cash reserves. So Tesla really going in here.

And I would add the fact that the SEC disclosure says that Tesla hopes to eventually accept Bitcoin as payment for its products. That could be the bigger news here. Now, of course, that being said, as Bitcoin's price rises, I don't think people want to spend it. So we talk about PayPal, which is also about to allow people to purchase in crypto, as the price goes up, no one actually wants to spend their Bitcoin. They want to buy it and hold it as an investment. But very interesting move, and I interpret this as, really, Musk getting serious, going from joking tweets to putting his money where his mouth is.