Bitcoin surges to record high as Tesla announces it has invested $1.5bn and will take it as payment

SpaceX owner and Tesla CEO Elon Musk arrives on the red carpet for the Axel Springer award, in Berlin, Germany on 01 December 2020 ((EPA))

Bitcoin has surged to a record high after a major announcement of support from Tesla.

The electric car company said it had invested $1.5bn (£1bn) in the cryptocurrency and would start taking it as payment.

Bitcoin's price surged around 14 per cent immediately after Tesla's announcement, soaring higher than ever before.

Tesla's shares also increased in the wake of the announcement.

Tesla made the investment after it "updated its investment policy" so that it could put its cash into other assets, it said. That could include "certain specific alternative reserve assets", it announced in a filing with the SEC.

"Thereafter, we invested an aggregate $1.50bn in bitcoin under this policy," it said in the same statement.

"Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt."

Elon Musk, Tesla's chief executive, has been especially vocal in recent days in his support for both bitcoin and cryptocurrency generally. Days ago, he added the word "bitcoin" to his bio, alongside its "B" logo, but it has since been removed.