Billionaire investor Ron Baron told CNBC on Monday that he believes buying Tesla’s bitcoin is “not surprising,” but the longtime shareholder of the electric car maker warned it wants to further explore the making process of decisions before issuing a judgment.
Elon Musk, CEO of Tesla, has been commenting favorably on bitcoin for some time, so the announcement on bitcoin [is] no wonder, ”Baron told Squawk Box co-presenter Becky Quick.
Baron has been bullish on Tesla for years and its eponymous investment company, Baron Capital, has a major stake in the electric vehicle manufacturer.
“I’m sure there have been a lot of reflections on the purchase of bitcoins by Tesla and I hope to know the reasons,” Baron added in his statements to Quick, who read them during the broadcast.
Tesla announced Monday to the Securities and Exchange Commission that it bought Bitcoin worth $ 1.5 billion and plans to begin accepting that cryptocurrency has payment for its products. Musk has been talking about bitcoin and dogecoin, another cryptocurrency, in recent tweets.
The price of bitcoin rose to a new record on Monday after Tesla’s purchase was made public, crossing above $ 44,000 per coin at one point.
Shares of Tesla rose more than 1% at the start of Monday’s trading session. Shares have plummeted in the past twelve months, up about 470% from Friday’s closing price of $ 852.23.
The sharp rise in Bitcoin prices over the past year has coincided with numerous well-known investors who have announced the cryptocurrency. Paul Tudor Jones, for example, has said he believes Bitcoin is a strong hedge against inflation. Established fintech technology companies, such as PayPal, have also made inroads into the cryptographic space and some believe that institutional adoption has been a major factor in the concentration of Bitcoin.
In his statements to CNBC, Baron pointed to the movements of “serious investors” like Jones and companies like PayPal, saying he should have recognized them earlier as possible advocates of greater bitcoin adoption.
Baron also cited Ark Invest founder and CEO Cathie Wood, a fellow Tesla uber-bull, as a proponent of Bitcoin. Wood’s company is also a major shareholder in Tesla. It has a goal of $ 7,000 per share for the electric car maker that will reach the end of 2024. In February 2018, Wood bravely predicted that Tesla shares would go to $ 4,000 each. These forecasts came out last month based on fractional adjustments.
In June, Baron told CNBC he believed “there are ten times more to move forward” on the rise in Tesla shares. Since then, the shares have exploded and achieved almost half of those gains in less than eight months. Tesla in August executed a 5 by 1 stock split. Since then the shares have taken off like a rocket. In October, Baron said he believed Tesla would end up becoming a $ 2 trillion company. As of Monday, Tesla’s market capitalization was just over $ 800 billion.