- Ron Baron says Elon Musk’s support of Bitcoin on Twitter makes the investment “not surprising.”
- Bitcoin rose to a record high when Tesla’s $1.5 billion investment was announced.
- Baron has been known for being bullish on the electric car company.
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Tesla shareholder Ron Baron says he is not surprised 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 told CNBC on Monday.
The billionaire investor pointed out that Tesla’s CEO, Elon Musk, has long been promoting the cryptocurrency on Twitter. Musk’s tweets about Bitcoin have often been linked to surges in the value of the digital currency. In January, the currency surged 15% after Musk put #bitcoin in his Twitter bio.
Bitcoin rose 16% to a record high Monday morning after Tesla revealed in its annual 10-k filing the same morning that the company had invested $1.5 billion in Bitcoin.
The electric car maker also plans to allow customers to use Bitcoin as a payment option.
Tesla investors like Baron could benefit from the decision to invest in Bitcoin
The announcement caused Tesla shares to jump 2%. Wedbush analyst Dan Ives said in a note the decision could cause the company's shares to continue to rise with the cryptocurrency.
The investment also has several risks, including Bitcoin's volatility as the currency has risen over 400% in the past year.
"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 said in December mass adoption of currencies like Bitcoin will continue to rise globally over the next 20 years.