Tesla Bought $1.5 Billion in Bitcoin
Updated: Feb 11, 2021
Image of Tesla car with Bitcoin logo (Source: wccftech)
February 8th, 2021
Tesla Inc (NASDAQ:TSLA) announced on Monday in an SEC filing that it would be investing $1.5 Billion in Bitcoin (BTC-USD) which saw a 12% increase, or a jump to $44,000, in the cryptocurrency.
Tesla becomes one of the biggest investors into the digital currency, falling only behind MicroStrategy in public company owners.
It does not come as a surprise due to CEO Elon Musk frequently tweeting his support regarding cryptocurrencies, like Bitcoin and Dogecoin, over the past couple of weeks.
The company also said that it would be accepting Bitcoin as a form of payment for its products. Musk says the new form of payment will give it a competitive edge to other automotive retailers due to it giving another option to consumers.
“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,” said the company in their 10-k filing with the Securities and Exchange Commission on Monday.
Tesla realizes some risks associated with Bitcoin including decentralization of the currency, lack of regulatory oversite, and its reliance on technology. The company acknowledges the potential security breaches that could occur from investments into the currency.
According to CNN Business, Michael Hartnett from Bank of America Securities claims that Bitcoin looks like the “mother of all bubbles”. Now, he doesn’t predict that the currency will fall tremendously, but he does say it’s another example of “increasingly speculative” investor behavior.