Bitcoin rose to an all-time high Monday after Tesla said it purchased $1.5 billion worth of the cryptocurrency.

The digital coin climbed 16 percent from a day previously to a record of $44,801.87 after Elon Musk’s electric-car maker exposed the substantial financial investment in a regulative filing.

Tesla likewise said it anticipates to start taking bitcoin as payment for its items “in the future,” including that it could liquidate any crypto payments it receives.

Musk himself backed bitcoin last week, saying it’s “on the verge of getting broad approval by traditional finance people.”

“I’m late to the party but I’m a supporter of bitcoin,” he said on the Clubhouse audio-chat app, according to CNet.

Nonetheless, Tesla’s Monday announcement likewise drew skeptics, who kept in mind that bitcoin is an abnormally dangerous way for Tesla to spend money on its corporate balance sheet.

“Bitcoin is yet another trick to entice more unsuspecting financiers into gambling on Tesla’s stock,” said David Trainer, CEO of the investment-research company New Constructs. “Tesla’s relocate to purchase $1.5 billion worth of Bitcoin is not a smart allowance of capital for a business that has actually burned billions of dollars over the past couple of years.”

Certainly, Tesla’s announcement did more for bitcoin on Monday than it provided for the business’s shares, which increased as much as 3 percent on the news and were just recently up about 1.4 percent at $864.01.

Tesla said it purchased bitcoin after tweaking its investment policy last month to “even more diversify and optimize returns” on cash that isn’t vital to its operating liquidity.

However the world’s most important car manufacturer noted that its brand-new cryptocurrency holdings include numerous risks, consisting of the wild rate swings that have actually been a major feature of bitcoin’s relatively brief history.

“The occurrence of such properties is a reasonably recent trend, and their long-lasting adoption by investors, consumers and organizations is unforeseeable,” Tesla said in its filing with the Securities and Exchange Commission.

“Additionally, their lack of a physical form, their reliance on technology for their development, presence and transactional validation and their decentralization might subject their stability to the danger of malicious attacks and technological obsolescence.”

Musk first mused about getting Tesla into the bitcoin market in a December Twitter exchange with MicroStrategy CEO Michael Saylor, whose business-intelligence firm purchased more than $1 billion worth of the digital currency in 2015.

The surprise announcement was the most recent sign of bitcoin’s growing support amongst companies and institutional financiers, a trend that’s helped increase its rate in current months.

Wedbush Securities analyst Daniel Ives stated the move could improve Tesla’s stock price as investors incorporate the business’s exposure to cryptocurrency into its total appraisal.

“Ultimately, financiers and other industry watchers will be enjoying this closely to see if other corporations follow the lead of Tesla on this crypto path,” Ives wrote in a research note.