Tesla — a top 10 company in the Fortune 100 that is run by one of the world’s wealthiest people, Elon Musk — transferred $1.5 billion of its treasury cash into Bitcoin (BTC) in early February. Musk’s Bitcoin purchase startled traditional investors, who now had to understand how their investment in Tesla would relate to Bitcoin.
Currently, much of Tesla’s revenue comes from selling surplus renewable energy credits, or RECs, which will dry up in the next several years as competing automakers produce their own zero-emissions vehicles and build up RECs with states that require them.
In Tesla’s filing with the United States Securities and Exchange Commission, the company stated that it updated its investment policy to be more flexible in diversifying and maximizing returns on idle cash. As part of this plan, Tesla said it would invest in certain “alternative reserve assets including digital assets, gold bullion, [and] gold exchange-traded funds.” The statement continues:
“Thereafter, we invested an aggregate $1.50 billion in Bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. 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.”
The Bitcoin market has seen Tesla’s recognition and advancement into the crypto industry as institutional validation for Bitcoin’s use as a store of value.
Using decentralized micro-energy sources for Bitcoin mining
Tesla’s other businesses produce and sell solar panels, solar roofs and batteries. The batteries are used in its cars and provide power storage for residential solar systems.
Residential solar systems can feed surplus energy into the grid. The local power company will prorate a customer’s electric bill based on the amount of…