On Monday Tesla announced that it has acquired bitcoins worth $1.5 billion. The company said it purchased the bitcoin in a filing with the Securities and Exchange Commission for “more flexibility that will further broaden and earn revenue on our cash.” In exchange for its goods, Tesla also said it would start taking payments in bitcoin. That would make Tesla the first large car manufacturer to embrace it.
This posed immediate concerns regarding the actions of CEO Elon Musk on Twitter in recent weeks, where he was credited for raising the prices of cryptocurrencies such as bitcoin and dogecoin through sharing encouraging tweets that inspired more individuals to purchase digital currencies.
The billionaire attached the hashtag #bitcoin to his Twitter bio two weeks ago, in a step that helped to drive up the cryptocurrency’s price by as much as 20 percent momentarily. Two days later, he told the Clubhouse social media chat site that he thinks bitcoin is a positive idea at this stage, and he is a bitcoin supporter.
This morning, news of the Tesla’s acquisition brought the bitcoin price up to more than $43,000, smashing its all-time record. As demand from both retail and corporate customers has risen, the price of the cryptocurrency has been steadily rising during 2021. However, with the price dipping below $30,000 in January alone, it still remains a volatile cryptocurrency.
The step of Tesla into bitcoin reflects an investment in the investment of a large proportion of its cash. At the end of 2020, the firm has more than $19 billion in cash and cash equivalents on hand, according to its current filing.