Tesla investor Ron Baron told CNBC on Monday that he was not surprised by the electric car maker’s bitcoin purchase, but warned that he wanted to further investigate the decision-making process before he could deliver a verdict.
Tesla announced at the Securities and Exchange Commission on Monday that it had bought $ 1.5 billion worth of bitcoin and planned to start accepting that the cryptocurrency had payment for its products.
Tesla CEO Eles Musk has been commenting on bitcoin for some time, hence the announcement regarding bitcoin [is] not surprisingly, “Baron told Becky Quick, co-host of Squawk Box.
Baron has been strong on Tesla for many years and its investment firm of the same name, Baron Capital, has a major stake in the electric vehicle manufacturer.
“I’m sure there has been a lot of thought given to the bitcoin purchase by Tesla and I look forward to learning the rationale,” the billionaire investor added in his remarks to Quick, who read it during the broadcast.
The price of bitcoin rose to a new record high on Monday after Tesla’s purchase became known, at one point exceeding more than $ 44,000 per coin.
Shares in Tesla were up more than 1% early in Monday’s trading session. The stock has ripped in the past twelve months, rising nearly 470% from Friday’s closing price of $ 852.23.
The sharp rise in Bitcoin prices over the past year has coincided with numerous high-profile investors predicting the crypto-currency. Paul Tudor Jones, for example, said he believes bitcoin is a strong hedge against inflation. Established fintech companies like PayPal have also gained access to the crypto space, and some believe institutional adoption has been a factor in the bitcoin protests.
In his remarks to CNBC, Baron pointed to the moves by ‘serious investors’ like Jones and companies like PayPal, saying he needed to recognize them earlier than possible forerunners for a larger adoption of bitcoin.
Baron also cites Ark Invest founder and CEO Cathie Wood, a fellow Tesla uber-bull, as a bitcoin supporter. Wood’s company is also a major shareholder in Tesla. She has a price target of $ 7,000 per share that the electric car manufacturer would reach by the end of 2024. In February 2018, Wood boldly predicted that Tesla shares would amount to $ 4,000 each. On a split-adjusted basis, the forecast came last month.
In June, Baron told CNBC that he believes there are ten times more to upside Tesla shares. Since then, shares have exploded, making nearly half of profits in less than eight months. Tesla conducted a 5-for-1 share split in August. Shares have since risen like a rocket ship. In October, Baron said he believed Tesla would eventually become a $ 2 trillion company. Tesla’s market capitalization was just over $ 800 billion as of Monday.