Tesla, the car manufacturing company co-founded and led by billionaire Elon Musk, bought the equivalent of $1.5 billion in Bitcoin as it prepares to accept it as a payment method, likely causing the coin’s value to spike.
According to a Securities and Exchange Commission (SEC) filing, the company is looking to maximize returns by investing cash that is not required for its immediate operation, having adjusted its investment policy earlier in January.
The updated investment policy allows the company to invest in “alternative reserve assets” to have more flexibility when it comes to diversifying its investments. The policies specify certain assets and include bitcoin, which the company decided to add to its portfolio.
The filing also states that Tesla is expecting to accept bitcoin as a form of payment “in the near future”, which the company could decide to liquidate or not upon receipt. This is unlikely as Tesla also manifested its intention to hold bitcoin on the long-term
While bitcoin would initially only be accepted by the company on a limited basis for payment for its products, there seems to be an intention to allow the general public to pay using the cryptocurrency.
Bitcoin’s Value Jumps 17%
The news about Tesla’s investment in Bitcoin resulted in the cryptocurrency experiencing a steep spike of 17% that saw it reach its new all-time high of $43233, breaking it some hours later to reach a current price of around $46k.
Tesla’s decision to actively invest in Bitcoin represents a vote of trust from one of the most important electric vehicles and clean energy companies in the world, which has greatly increase the legitimacy of the cryptocurrency.
The possibility of Tesla enabling the use of Bitcoin as a payment method would also play an important role in increasing the visibility of cryptocurrency and boosting mainstream adoption.
Michael Saylor, CEO of MicroStrategy, referred to the potential of Tesla’s move to transform the crypto ecosystem by…