Tesla, in a filing with the Securities and Exchange Commission, announced that it bought $1.5 billion worth of bitcoin. It mentioned it did so for more flexibility to further diversify and maximize returns on its cash. Also, it said there is a possibility it invests a future portion of its assets in digital assets, and that it will accept bitcoin as payment for its products “subject to applicable laws and initially on a limited basis.”
Tesla, with this move, is the first major automaker to accept bitcoin as payment (using the coin to pay for its products). This boosts the acceptance of bitcoin as a means of payment. Following Tesla’s announcement, the cryptocurrency’s price jumped sharply, reaching an all-time high of $47,458 at one point.
Wedbush analyst Dan Ives said in a note that Tesla’s stake in bitcoin “will have a ripple effect across corporations around the globe.” According to him, it is a “potential game changing move for the use of bitcoin from a transactional perspective.”
The giant automaker’s investment follows what has been a wide embracing of the volatile cryptocurrency. Square, PayPal, and Fidelity Investments last year announced big moves allowing their customers to be involved in the digital asset. Furthermore, interest in the cryptocurrency from high-profile investors like Paul Tudor Jones and Stanley Druckenmiller has been positive for the digital asset.
In a comment about Tesla’s $1.5 billion acquisition of bitcoin, Bespoke Investment Group said in a note; “TSLA (Tesla) hasn’t historically been a company to shy away from publicity, so some will write off today’s announcement as a marketing stunt, but at $1.5 billion, it would be a pretty big stunt. Also, while it is easy to forget, TSLA is one of the largest companies in the world.”
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