Holders of Bitcoin may be able to cash in some of their investment in the digital currency for a brand new electric car.
Tesla says it has invested $1.5 billion in the bitcoin cryptocurrency. The electric car manufacturer filed its annual 10-K report with the SEC this morning, and revealed the new bitcoin investment. Tesla says it will also “begin accepting bitcoin as a form of payment for our products in the near future.”
Tesla customers have been calling on founder and CEO Elon Musk to accept bitcoin for vehicle purchases recently. The price of Bitcoin soared 15.4% to around $44,500 Monday in reaction to Tesla’s announcement, according to CoinBase.
Musk has also been backing Dogecoin on Twitter over the past week, sending its value up just moments after his tweets.
In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets.
Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
Whether other major companies will follow Tesla’s lead in investing in Bitcoin or accepting it for transactions is unclear. A vehicle is a large purchase, which could make Bitcoin a better fit to pay for it, but the wild price swings in Bitcoin could be a significant risk to any merchant who decided to accept it.