Tesla revealed on Monday that she purchased $1.5 billion worth of bitcoin.
In filing with the Securities and Exchange Commission, the company said it had bought bitcoin for “more flexibility to further diversify and maximize our cash returns.”
Tesla also said that it would start accepting payments in bitcoin in return for its products “subject to applicable laws and initially on a limited basis.” This will make Tesla the first major automaker to do so. Bitcoin’s $1.5 billion will provide Tesla with cryptocurrency liquidity as soon as it begins accepting it for payments.
Tesla’s move into bitcoin represents an investment of a significant percentage of its cash in the investment. The company had more than $19 billion in cash and cash equivalents available at the end of 2020, according to its most recent filing.
Moves raise concerns about the recent actions of CEO Elon Musk on Twitter, where he has been credited with raising cryptocurrency prices including bitcoin and dogecoin through posting supportive messages that have inspired more people to purchase digital currencies.
Two weeks ago, billionaire Tesla added the #bitcoin hashtag to his Twitter bio, a decision that helped briefly drive up the price of cryptocurrency by as much as 20%. Two days later, he said on the Clubhouse social media chat forum, “I think bitcoin is a good thing at this point, and I’m a bitcoin supporter.”
Bitcoin prices soared to new highs on Monday following Tesla’s announcement, hitting a price of at least $44,200. Tesla shares were up more than 2% on Monday morning. In its SEC filing, Tesla warned investors that the price of bitcoin was unpredictable.
The Value of bitcoin continues to raise