Tesla buys $1.5bn in Bitcoin, plans to begin accepting it as form of payment

Fin Strathern reports on blockchain and cryptocurrencies for TechForge Media. You can connect with him at https://www.linkedin.com/in/finstrathern/.

Tesla announced on Monday that it has invested $1.5 billion (£1.1bn) into Bitcoin back in January, and that it plans to start accepting it as a form of payment soon.

The car firm, who has seen its share price soar in the past year, specified in a stock market filing on its forward-looking statements for 2021 that it has updated its investment policy to allow for ‘more flexibility to further diversify and maximise returns on cash that is not required to maintain adequate operating liquidity.’

As part of this policy, the company intends to invest portions of its cash into ‘alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.’

Most notable from this report is the confirmation of an enormous investment into leading cryptocurrency, Bitcoin. The announcement caused Bitcoin’s price to surge to a record high of $44,801 within an hour, a 14% increase.

Tesla’s CEO, Elon Musk, who became the world’s richest person at the start of the new year, has become an unlikely anti-establishment hero on social media platforms for his tweets supporting buying stocks in GameStop and cryptocurrencies such as Dogecoin.

The company’s plan to accept Bitcoin as a form of payment follows on from PayPal, the last major S&P 500 company to announce cryptocurrency support back in October.

Market speculators anticipate Tesla’s announcement will drive an accelerated acceptance of Bitcoin among other companies. Eric Turner, vice president of market intelligence at Messari, told the BBC: “I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move.”

Photo by Milan Csizmadia on Unsplash

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