As crazy as it may sound, yes Tesla yesterday bought bitcoins worth $1.5 billion. And upon filing the investment with the Securities and Exchange Commission, the company revealed that with this move, they aim to bring more flexibility into diversifying and maximizing returns on cash.
With that, Tesla will now also accept bitcoins as a payment option for its products but that still would be subject to applicable laws and with a set limit. This not only makes Tesla the first major automaker company to rely on bitcoins, but sooner they will also have liquidity in cryptocurrency.
Tesla has invested a whopping percentage of its cash in bitcoins if we consider that the company had $19 billion in its cash and cash equivalents reserves, according to the filing at the end of 2020.
Tesla’s CEO Elon Musk, in recent times has been pretty vocal about supporting bitcoins. In his recent series of tweets, he has clearly been promoting bitcoin and dogecoin so that more people should invest in the digital currency and as a result, this can also increase the prices of cryptocurrencies further.
Moreover, two weeks ago, Musk also added #bitcoin to his Twitter bio - a move that suddenly made the price of cryptocurrency go up by 20%. While being on a social media chat site Clubhouse, Musk also admitted that "bitcoin is a good thing", and he is a "supporter of bitcoin.”
Musk has a history of falling into trouble for tweeting market-moving things. However, this time we can’t be sure whether his tweets about cryptocurrencies would land him into a similar controversy dungeon or not. More recently in 2018, the SEC already charged Musk for tweeting about how he plans to take the company private at $420 per share - which was a fraud move.
Although Musk later made a settlement with the SEC by stepping down from the chairman’s role within the company and also paid a $20 million fine (along with another $20 million fine on behalf of the company).
Nevertheless, as a result of Tesla’s announcement, the price of bitcoin reached a new high of $44,200 on Monday. Tesla also saw a 2% increase in its share price following the move but in the SEC filing, Tesla has clearly warned investors to remain vigilant about the volatility of bitcoin’s price.
Credit: ChinaFotoPress via Getty Images
Read next: The Top Companies That Started During a Recession (infographic)
With that, Tesla will now also accept bitcoins as a payment option for its products but that still would be subject to applicable laws and with a set limit. This not only makes Tesla the first major automaker company to rely on bitcoins, but sooner they will also have liquidity in cryptocurrency.
Tesla has invested a whopping percentage of its cash in bitcoins if we consider that the company had $19 billion in its cash and cash equivalents reserves, according to the filing at the end of 2020.
Tesla’s CEO Elon Musk, in recent times has been pretty vocal about supporting bitcoins. In his recent series of tweets, he has clearly been promoting bitcoin and dogecoin so that more people should invest in the digital currency and as a result, this can also increase the prices of cryptocurrencies further.
Moreover, two weeks ago, Musk also added #bitcoin to his Twitter bio - a move that suddenly made the price of cryptocurrency go up by 20%. While being on a social media chat site Clubhouse, Musk also admitted that "bitcoin is a good thing", and he is a "supporter of bitcoin.”
Musk has a history of falling into trouble for tweeting market-moving things. However, this time we can’t be sure whether his tweets about cryptocurrencies would land him into a similar controversy dungeon or not. More recently in 2018, the SEC already charged Musk for tweeting about how he plans to take the company private at $420 per share - which was a fraud move.
Although Musk later made a settlement with the SEC by stepping down from the chairman’s role within the company and also paid a $20 million fine (along with another $20 million fine on behalf of the company).
Nevertheless, as a result of Tesla’s announcement, the price of bitcoin reached a new high of $44,200 on Monday. Tesla also saw a 2% increase in its share price following the move but in the SEC filing, Tesla has clearly warned investors to remain vigilant about the volatility of bitcoin’s price.
Credit: ChinaFotoPress via Getty Images
Read next: The Top Companies That Started During a Recession (infographic)
