Bitcoin hit a new record above $47,000 on Tuesday after Elon Musk announced a $1.5 billion investment by Tesla in Bitcoin. Bitcoin increased as much as 6.3% to almost $47,493 in Asian trading. But why is this investment so important?

Tesla’s disclosure Monday sent the price increasing. The company also revealed that it would start accepting the digital token as a form of payment for its electric cars.

The endorsement of the controversial cryptocurrency by an important company has forced investors to reimagine their portfolio.

Here’s what Bitcoin’s proponents and sceptics say about Tesla’s investment in Bitcoin:

  • If any lesser mortals had made the decision to put part of their balance sheet in Bitcoin, I don’t think it would have been taken seriously. But when the richest man in the world does it, everyone has to take a second look.

Thomas Hayes, managing member at Great Hill Capital LLC in New York, told Reuters.

  • One by one, corporations will add Bitcoin to their balance sheets and it couldn’t get bigger than Tesla. Imagine if 100 companies start putting even 1% into Bitcoin, what that is going to do to demand and supply.

Vijay Ayyar, head of Asia Pacific with cryptocurrency exchange Luno in Singapore, told Bloomberg.

  • The crypto craze is entirely driven by short-term speculative momentum/mania. For all the noise I keep hearing about how high Bitcoin may go, the noise around how it will be used in everyday life is deafeningly silent.

Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte, told Bloomberg.

  • “This is a surprise that is also not a surprise at all. Elon Musk has been talking about bitcoin for a long time. The number of users on ZebPay did more than double right after the news. It’s a sign to other companies that bitcoin is a solid reserve asset for any balance sheet. We hope central banks will join in and that this news helps nudge the government to buy, not ban bitcoin and let every Indian do the same. Now if tomorrow Tesla also buys a billion dollars of dogecoin, that will be a surprise.”

Rahul Pagidipati, CEO of ZebPay, told LiveMint.

  • The argument for bitcoin is evolving. It used to be negative (reasons to buy), but suddenly there are positive reasons, and that’s why you see bitcoin at (new highs).

Mohamed El-Erian, chief economic advisor of Allianz, told CNBC.

“If this becomes a trend in corporate treasuries the downside of staying on the sidelines will only become costlier over time,”

Maya Zehavi, a blockchain consultant, told Reuters.

Tesla’s move to put some of its corporate reserves in bitcoin may be a signal that it expects the cryptocurrency will emerge as another store of long-term value alongside the dollar and gold. Companies are very careful when it comes down to their reserves. This doesn’t appear to be a flash in the pan. It appears to be something that may be a fundamental change.

Graham Tanaka, president and chief investment officer of Tanaka Capital Management in New York, told Reuters. ‘

  • In an expansionary, monetary environment, you want scarce assets. The scarcest asset in the world is Bitcoin. It’s digital gold. Gold will lose out to Bitcoin in reallocations. If we bought gold instead of Bitcoin, we would be down $2 billion. It would have been a disaster. Once people start thinking about what they want, which is a non-sovereign, safe-haven store of value, they’re going to realize that Bitcoin does the job of gold better, and you’re seeing all of the institutional flows move out of gold into Bitcoin.

Michael Saylor, MicroStrategy Inc.’s chief executive officer, in an interview on Bloomberg Television.

  • You’re going to see every company in America do the same thing. Between corporations adding Bitcoin to treasury funds and the city of Miami also considering adding the cryptocurrency to its balance sheet. It doesn’t have to be a lot. It’s the messaging that matters, you’re seeing the herd here, and it’s coming.

Michael Novogratz, the founder of cryptocurrency investment firm Galaxy Digital, told Bloomberg.