Tech billionaire Elon Musk’s electric vehicle company Tesla, which has also recently set up its plant in India, has invested $1.5 billion in the bitcoin cryptocurrency. This has been reported according to its annual 10-K report filed with the US Securities and Exchange Commission (SEC) on Monday.
In another interesting move, Tesla said it will also begin accepting bitcoin as a form of payment for their products in the near future.
The billionaire has been, in recent times, seen supporting and promoting cryptocurrencies and other social media platforms on his twitter account, making their shares surge by a hefty amount. In his recent tweet “use signal”, shares of the social media platform surged by 12,000% record high. Thus, Elon musk is also known for changing fortunes of companies with his single tweet.
Bitcoin surged an all-time high after Tesla Inc said it’s invested $1.5 billion, becoming the biggest automaker company yet to back the controversial cryptocurrency.
Bitcoin jumped by a record worthy 15% after Tesla made the disclosure in a regulatory filing, with prices exceeding $44,000 for the first time.
The cryptocurrency announcement comes amid renewed interest shown by Musk in cryptocurrency and requests from Tesla customers for accepting bitcoin for buying the cars In January 2021. Tesla reports that they have updated their investment policy to provide them with more flexibility to further diversify and maximize returns on their 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,” it added.
Musk has also been seen posting tweets in support of Dogecoin over the past week. It has led to a rise in the cryptocurrency value.
Dogecoin is the people’s crypto
— Elon Musk (@elonmusk) February 4, 2021
Tesla, one of the world’s most influential automaker companies, and billionaire Elon Musk have thrown their weight behind Bitcoin. This comes as a massive sign of support for the cryptocurrency, which has been criticized by policymakers for facilitating money laundering and fraud.
There have always been contentions about investing in cryptocurrencies. This is because of its highly volatile nature. This is primarily due to the factor that cryptocurrencies aren’t government backed or don’t have any legal backing.
Antoni Trenchev, managing partner and co-founder of Nexo in London stated “The world’s richest man allocating $1.5 billion of his company’s treasury to Bitcoin speaks volumes about the magnitude at which crypto gains institutional adoption,”. he further added that “Tesla has now paved the way.”
Trenchev said he positively expects that at least 10% of S&P 500 companies will be invested in Bitcoin by the end of 2022.
Tesla’s investment in bitcoin represents an investment of a significant percentage of cash in the investment. The company in its recent fillings stated that it had more than $19 billion in cash and cash equivalents on hand at the end of 2020. Thus investment of $1.5 billion in bitcoin comes across as a significant investment for tesla. Investing in bitcoin will give tesla liquidity in the cryptocurrency, once it starts accepting the currency as a form of payment.