February 27, 2024

Billionaire Ron Baron told CNBC on Monday that he thought Tesla’s Bitcoin purchase was “unsurprising,” but the electric car maker’s long-time shareholder warned he wanted to investigate the decision-making process further before making a judgment.

Elon Musk, CEO of Tesla, has been positive about Bitcoin for some time, hence the Bitcoin announcement [is] No wonder, Baron told Becky Quick, co-host of Squawk Box.

Baron has been optimistic about Tesla for years and his eponymous investment firm, Baron Capital, has a significant stake in the electric vehicle maker.

“I’m sure Tesla has put a lot of thought into Bitcoin and I look forward to hearing the reasons behind it,” Baron added in his remarks to Quick, who read it on the air.

Tesla announced in a notice filed with the Securities and Exchange Commission Monday that it had purchased $ 1.5 billion worth of Bitcoin and plans to accept the cryptocurrency for its products. Musk has been talking about Bitcoin and Dogecoin, another cryptocurrency, in recent tweets.

Bitcoin price soared to a new record high on the Monday following the announcement of Tesla’s purchase, exceeding more than $ 44,000 per coin at one point.

Tesla’s shares were up more than 1% at the start of Monday’s trading session. The stock has been in a rift for the past 12 months, rising nearly 470% since its closing price of $ 852.23 on Friday.

The sharp rise in the price of Bitcoin last year coincided with numerous high-profile investors promoting the cryptocurrency. Paul Tudor Jones, for example, believes Bitcoin is a strong hedge against inflation. Established fintech firms like PayPal have also been given access to the crypto room, and some believe institutional adoption was a factor in the bitcoin rally.

In his remarks on CNBC, Baron pointed to the moves of “serious investors” like Jones and companies like PayPal and said he should have recognized them sooner as possible harbingers of an increased adoption of Bitcoin.

Baron also cited Ark Invest founder and CEO Cathie Wood, a Tesla over-bull, as a Bitcoin supporter. Wood’s company is also a major shareholder in Tesla. It has a price target of $ 7,000 per share that the electric car maker aims to achieve by the end of 2024. In February 2018, Wood boldly predicted that Tesla stock would soar to $ 4,000 each. On a split-adjusted basis, this forecast was fulfilled last month.

Back in June, Baron told CNBC that he believed Tesla stock had “ten times more to do”. Since then, stocks have skyrocketed, making nearly half of those gains in less than eight months. Tesla conducted a 5-for-1 stock split in August. The stocks have since taken off like a rocket ship. Then in October, Baron said he believed Tesla would eventually become a $ 2 trillion company. On Monday, Tesla’s market cap was just over $ 800 billion.