Tesla buys $1.5B in bitcoin, may accept the cryptocurrency as payment in the future

Yesterday in an SEC filing, Tesla disclosed that it has acquired $1.5 billion in bitcoin, the popular cryptocurrency. Moreover, the company noted that it may also accept bitcoin in the future as a form of payment for its cars, though it did allow that there is some regulatory uncertainty around that effort.

As the news broke, the price of bitcoin instantly rose by around 7% to more than $40,000 per coin. Tesla had previously telegraphed that it had an interest in the cryptocurrency, however to purchase such a large block of the coin is notable.

In its filing, Tesla writes that earlier this year it “updated [its] investment policy to provide [it] with more flexibility to further diversify and maximize returns on [its] cash that is not required to maintain adequate operating liquidity,” adding that it has the option of putting cash into “certain alternative reserve assets” that include “digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.”

Under that banner, the firm has “invested an aggregate $1.50 billion in bitcoin,” going on to say that the well-known electric car company “may acquire and hold digital assets from time to time or long-term.” That’s enough wiggle room for Tesla to do whatever it wants with its cash and the crypto markets.

But the company wasn’t done, completing its news-drop by adding that the company “…expects to begin accepting bitcoin as a form of payment for [its] products in the near future, subject to applicable laws and initially on a limited basis, which [it] may or may not liquidate upon receipt.”

Tesla CEO Elon Musk has made waves in recent days by pumping a meme cryptocurrency called Dogecoin; this is something more material. Tesla is selecting bitcoin as the cryptocurrency of its choice, helping to further cement the blockchain as the world’s best known. And that it may accept bitcoin-denominated transactions in the future could help bitcoin retain both value and exchange volume, though we probably repeat ourselves. It’s worth noting that Musk himself has also personally sent bitcoin prices higher in the past using his social presence, including by changing his bio to just the single word, before its price faded back after he removed it earlier this month.

The car company then spends three paragraphs saying that its choice is risky. That’s an understatement. Then again, what is Musk if not entertaining?

 



Source: Tech Crunch
Image Source: Tech Crunch