Tesla supercharges Bitcoin, Brent barrels above $60

LONDON — Bitcoin hit a record-high near $45,000 on Monday after Elon Musk's electric carmaker Tesla invested $1.5 billion in the digital currency.

Meanwhile, the benchmark oil contract Brent North Sea rose above $60 per barrel to hit the highest level since the coronavirus pandemic began to spread globally almost a year ago.

Shortly after news broke of Tesla's investment Bitcoin hit $44,795.20 before pulling back slightly.

The cryptocurrency is up by around 50 per cent since the start of the year.

"This is probably one of the biggest developments for the cryptocurrency industry," noted Fawad Razaqzada, analyst at ThinkMarkets.

"Tesla is going to be a major player in the auto industry and if it starts accepting Bitcoin as a form of payment, it will give the digital currency further legitimacy."

Tesla's announcement, in a US Securities and Exchange Commission document, is a sign of confidence in the cryptocurrency that regulators are concerned could be used for illegal transactions.

"As more and more companies start accepting Bitcoin, this will only lead to further increases in demand in a market which is limited in supply," Razaqzada added. 

Tesla's move comes after CEO Musk last week changed his Twitter bio to read simply "#bitcoin".

Just 12 years old, bitcoin has been on a meteoric rise since March, when it stood at $5,000, spurred by online payments giant PayPal saying it would allow account holders to use cryptocurrency.

The climb in Brent above $60 has come owing to the Organisation of the Petroleum Exporting Countries (OPEC) and its allies cutting output after the coronavirus pandemic slashed demand, according to analysts.

"It is worth reminding oneself that OPEC+ is the single most important reason for why the oil price reached $60" on Monday, noted Bjarne Schieldrop, chief commodities analyst at SEB Research. 

"It is because of large cuts by OPEC+... since May," he added.

Brent crude hit $60.27 per barrel on Monday, the first time it has exceeded $60 since February 2020.

Crude and other assets are winning support also from the prospect of a $1.9 trillion US stimulus package. 

European and Asian stock markets climbed on Monday, with Wall Street also rising at the open of trading.

The dollar gained in value against other major currencies.

Adding to the upbeat mood is data showing new COVID infection rates, with last week seeing the lowest level since October, while governments begin to get to grips with inoculation programmes.