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Thursday, March 04, 2021

Tesla stashes $1.5 bn in bitcoin, to accept as payment for cars soon

Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash.

By: Reuters |
Updated: February 8, 2021 7:03:32 pm
Bitcoin surged after Tesla made the disclosure to hit a record high.

Tesla Inc said on Monday it had invested around $1.5 billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a 7% jump in the electronic currency.

Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash. It said it had invested an aggregate $1.5 billion in bitcoin under the changed policy and could “acquire and hold digital assets from time to time or long-term”.

Bitcoin jumped more than 10% on Monday to a record high after after Tesla made the disclosure to hit a record high.

The news sent Bitcoin soaring as high as $43,625 as of 1300 GMT.

Smaller cryptocurrencies including ethereum and XRP that tend to move in tandem with bitcoin also jumped, rising as much as 5% and 4% respectively.The electric carmaker unveiled the investment ten days after its chief executive Elon Musk drove up the cryptocurrency’s price by adding a “#bitcoin” tag on his Twitter profile page.

Musk removed the tag from his Twitter bio a few days later but has continued talking up bitcoin and other cryptocurrencies, in particular, dogecoin, to his 46 million Twitter followers.

In December, he had mooted the possibility of converting “large transactions” of Tesla’s balance sheet into bitcoin.Bitcoin is up almost 50% this year following gains of over 300% in 2020.

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