Tesla has invested $1.5 billion in the bitcoin currency. Simultaneously, Bitcoin’s price rocketed to an all-time high after Tesla revealed a significant stake in the cryptocurrency. The revelation causes a sharp rise in the market valuation of Bitcoin, and, now at the time of writing, Bitcoin stands at its record highest price of $45937.60. Tesla has also stated it would begin accepting Bitcoin as payment for its products as well in the future.
In a 10-K filing report with the Securities and Exchange Commission that it had purchased $1.5 billion worth of Bitcoin to provide it with “more flexibility to further diversify and maximize returns on our cash.” The company has also asserted that it may invest in digital assets in the future and that it will accept bitcoin as payment for products “subject to applicable laws and at first on a limited basis.”
In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets.Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
The largest cryptocurrency in the world climbed 14% to $44180.3, its highest value since its inception. Tesla’s announcement sent the stock to an intraday record high of $44,762.4. The pandemic ridden year 2020 has been the banner year for Bitcoin. It just finished this banner year with a meteoric rise in its price.
As a result of this recent move, Tesla becomes the first major automaker to accept bitcoin for payment. Significantly, bitcoin’s recent surge has made it worth $888 billion, compared to Tesla’s market cap of $869 billion.
CEO Elon Musk has publicly endorsed Bitcoin on the micro-blogging social media platform Twitter, most recently adding the hashtag #bitcoin to his bio.
Besides backing Bitcoin on Twitter, Musk has also been boosting the relatively lesser-known Dogecoin’s value as well quickly after tweeting about it.
Last year, Tesla had also seen a huge rise in its stocks, causing it to place its CEO on the world’s richest person slot, leaving behind Jeff Bezos of Amazon. Although, Jeff Bezos regained his position shortly.
Tesla’s investment in bitcoin is yet another sign that the volatile cryptocurrency is gaining traction. Fundera reports that California is home to 440 bitcoin-accepting businesses — more than any state in the US by the end of 2020. There have been some big announcements related to Fidelity Investments, Square, and PayPal in the past year, making it possible for their clients to cash in on digital assets.
Microsoft accepts Bitcoin to add to your Microsoft account. The company initially stopped accepting cryptocurrencies but soon after resumed its services. Wikipedia also accepts donations in Bitcoins, while the payment is handled through BitPay.