Electric car company, Tesla has become the latest publicly traded U.S company to buy bitcoin with its cash reserves.
In a Monday filing with the Securities and Exchange Commission, Tesla disclosed that it had invested $1.5 billion in bitcoin in a bid to “further diversify and maximize returns” on its idle cash holdings.
As of December 2020, the company held $19 billion in cash and cash equivalents. Therefore, their bitcoin bet represents a significant portion of their cash holdings with an approximate 7% allocation to BTC.
Additionally, Tesla told the SEC that it plans to accept bitcoin payments for its products, subject to “applicable laws and initially on a limited basis,” and will reserve the right to choose whether or not they will liquidate bitcoins that they collect from customers.
The news comes within a few days after Tesla CEO, Elon Musk told an audience on a social media channel, Clubhouse that he thinks bitcoin is a good thing and supports the cryptocurrency.
While Musk has at the same time notoriously led a price pump for meme cryptocurrency, Doge, he briefly added the Bitcoin hashtag to his Twitter bio. The bitcoin hashtag was accompanied by a message, “in retrospect, it was inevitable,” perhaps hinting at his company’s decision to buy bitcoin.
Tesla now joins Square and MicroStrategy as publicly-traded U.S tech companies to have bitcoin on their balance, with the firms now holding a combined $2.3 billion worth of cash in BTC.
Bitcoin Sees New All-time High in the Wake of Tesla Move
As one would expect, news of Tesla’s bitcoin acquisition caused the cryptocurrency price to soar to a new all-time high. Bitcoin briefly touched levels above $44,800 (£32,640).
Although the momentum has dropped slightly in the build-up to press time, Bitcoin has now surpassed an $800 billion market cap for the first time and could rich even higher numbers if other companies copy Tesla’s move.