In an SEC filing Monday, Tesla reported that it has acquired bitcoin worth $1.5 billion. The company has announced it will start using bitcoin for its goods as a payment form.
CEO Elon Musk has been noted for his tweets about cryptocurrencies, like Bitcoin.
The step of Tesla into Bitcoin reflects an investment in the investment of a large proportion of its cash. According to its most official filing, at the end of 2020, the firm has over $19 billion in cash and cash equivalents on deposit.
Tesla bought #bitcoin while the St. Louis Fed just wrote a research paper about DeFi, and it's still only Monday.
— Blockfolio (@blockfolio) February 8, 2021
The business said it acquired the bitcoin in a filing with the Securities and Exchange Commission for “more flexibility to further diversify and maximize returns on our cash.”
Tesla’s Effect on the Bitcoin Markets
In return for its products, Tesla has said it would begin taking payments in bitcoin “subject to applicable laws and initially on a limited basis.” This will make Tesla the first big automaker to do so. If it begins allowing it for purchases, the $1.5 billion valuation of bitcoin would give Tesla liquidity in the cryptocurrency.
Following Tesla’s announcement, Bitcoin values soared to fresh peaks Monday, touching a price of at least $44,200. Tesla shares rose by more than 2% on Monday morning. Tesla notified investors of the uncertainty of the bitcoin price in its SEC filing.
Two weeks ago, the billionaire owned by Tesla introduced the hashtag #bitcoin to his bio on Twitter, a development that helped drive up the cryptocurrency price momentarily by as much as 20 percent. Two days later, on the Clubhouse social media chat site, he said, “I think Bitcoin is a positive idea at this stage, and I’m a Bitcoin supporter.”
Elon Musk’s Support for Bitcoin
Musk has openly stated his support for Bitcoin in recent times.
“I am a Bitcoin fan. I’m late but a supporter at the party. I assume bitcoin is on the brink of being universally embraced by traditional people in finance.
“I think Bitcoin is a good thing at this point,” Musk said on the Clubhouse live stream.
Musk’s remarks put him at odds with many global central bankers and regulators who have recently cautioned that Bitcoin is mostly used for criminal and money laundering purposes.
Musk said people have wanted to include him with Bitcoin in the past, going back to 2013, when Bitcoin was worth a fraction of what it is now, selling for less than $100.
Bitcoin has more than quadrupled in price over the course of last year. It then hit a new all-time high of approximately $42,000 at the beginning of 2021. Today, it reached $47,000 on the heels of the Tesla news. Bullish investors say the digital coin has earned a boost from increased institutional support and the perception that it is a gold-like safe-haven commodity.
How do you feel about Tesla’s big bet on Bitcoin?
