Ron Baron asserts Elon Musk’s support of Bitcoin on Twitter makes the investment “not surprising.” Bitcoin (BTC) surged to a record high when Tesla’s $1.5 billion investment was announced. Baron has been acknowledged for being bullish on the electric car company.
Tesla shareholder Ron Baron states he is not startled by the company’s decision to purchase $1.5 billion in Bitcoin.
“I’m sure a lot of thought went into the bitcoin purchase by Tesla, and I look forward to learning the rationale,” Baron informed CNBC last Monday.
The billionaire investor pointed out that Tesla’s CEO, Elon Musk, has long been supporting the cryptocurrency on Twitter. Musk’s tweets about Bitcoin have often been associated with surges in the value of the digital currency. In January, the currency soared 15% after Musk put #bitcoin in his Twitter bio.
Bitcoin climbed 16% to a record high Monday morning after Tesla announced in its annual 10-k filing the same morning that the company had invested $1.5 billion in Bitcoin.
The electric car maker also proposes to allow customers to use Bitcoin as a payment option.
Tesla investors like Baron could benefit from the decision to invest in Bitcoin
The statement caused Tesla shares to jump 2%. Wedbush analyst Dan Ives stated in a note the decision could cause the company’s shares to continue to rise with the cryptocurrency.
The investment also has certain risks, including Bitcoin’s volatility as the currency has risen over 400% in the past year.
Tesla communicated in a filing with the US Securities and Exchange Commission the company had weighed the risks.
“The prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable” the Tesla file read.
Baron has been known for being bullish when it comes to Tesla. The investor has earned over $4 billion from investing in the company. In December, he said Tesla could be worth $2 trillion in a few years.
Baron says Musk’s decision falls in line with the increased interest in the currency he has seen by other companies like PayPal, which announced US customers could buy and sell the cryptocurrencies on the platform back in November.
The investor also pointed to billionaire hedge fund manager Paul Tudor Jones, who cited in December mass adoption of currencies like Bitcoin will continue to rise globally over the next 20 years.
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