Longtime Tesla (NASDAQ: TSLA) bull and billionaire investor Ron Baron commented on the automaker’s decision to invest $1.5 billion in Bitcoin, releasing a statement on Monday morning. Baron said he “looks forward to learning the rationale” behind Tesla’s strategy to use Bitcoin, as it could become a payment method for the company’s products in the future.
Elon Musk “has been commenting favorably about Bitcoin for a while, so the announcement regarding Bitcoin [is] not surprising,” Baron said in a statement read by CNBC on Monday morning’s Squawk Box. Musk, who has rallied behind numerous Cryptocurrencies recently, including Dogecoin, has been a supporter of Bitcoin for some time. The CEO had recently had #Bitcoin in his Twitter bio, but it has been removed.
On Monday morning, Tesla announced in a 10-K filing with the Securities and Exchange Commission (SEC) it had purchased $1.5 billion worth of Bitcoin. After the announcement, BTC surged over $44,000 per coin, before dropping slightly under $43,700. The Cryptocurrency is still up on the day, seeing a 15.08% gain as of 10:33 AM EST, or around $5,730.
Baron didn’t disclose whether he was in favor of Tesla’s move to invest in Bitcoin, but did state that “I’m sure a lot of thought went into the Bitcoin purchase by Tesla and I look forward to learning the rationale.”
Baron holds a long position with Tesla shares, and in February 2020, held over $1 billion in TSLA shares. Since then, the stock has gained over five-times its value. In February 2020, Tesla shares were trading at $160.01, compared to the over $867 per share the company trades at currently.
Baron has been a longtime believer in Tesla and other Musk entities and has stated in the past that he is excited for SpaceX’s possible Initial Public Offering (IPO).
In the past several years, Bitcoin has become widely popular after late 2017 and early 2018 surges sent the crypto into superstardom. Since then, large companies, including AT&T, Rolex, Wikipedia, and Microsoft have all started to accept BTC as a payment method for goods. Cryptocurrencies are an alternative to a federally-backed currency like the dollar and are favorable for some as the system does not require a central authority, like a large bank.
At the time of writing, Tesla shares were trading at $870.32, up over 2%. Bitcoin has gained nearly 15% in value over the past 24 hours, according to CoinDesk, trading at $43,688.18.
Disclaimer: Joey Klender is a TSLA Shareholder. He does not hold any positions in Bitcoin and has no intentions to change any positions in the next 72 hours.