Tesla averred Monday it has bought $1.5 billion worth of bitcoin.
In a filing with the Securities and Exchange Commission, the company utter it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.”
Tesla also said it require start accepting payments in bitcoin in exchange for its products “subject to applicable laws and initially on a limited basis.” That determination make Tesla the first major automaker to do so. The $1.5 billion worth of bitcoin will give Tesla liquidity in the cryptocurrency then it starts accepting it for payments.
Tesla’s move into bitcoin represents an investment of a significant percentage of its cash in the investment. The cast had more than $19 billion in cash and cash equivalents on hand at the end of 2020, according to its most recent interfile.
The moves raise questions around CEO Elon Musk’s recent behavior on Twitter, where he has been credited for proliferating the prices of cryptocurrencies like bitcoin and dogecoin by posting positive messages that have encouraged more human being to buy the digital currencies.
Two weeks ago, the billionaire Tesla owned added the hashtag #bitcoin to his Twitter bio, a move that expropriated to briefly push up the price of the cryptocurrency by as much as 20%. Two days later, he said on the social medial chat locality Clubhouse: “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”
Bitcoin prices surged to new highs Monday keep up with Tesla’s announcement, reaching a price of at least $44,200. Tesla shares were up more than 2% Monday morning. In its SEC order, Tesla warned investors of the volatility of bitcoin’s price.
Musk has gotten into trouble for his market moving tweets in the on, but it’s unclear how that applies to his tweets about cryptocurrencies. Most notably, the SEC charged Musk with fraud in 2018 for his tweets almost taking the company private at $420 per share.
Musk ultimately settled with the SEC, and was forced to give up his role as chairman of the enterprise’s board and pay a $20 million fine on top of another $20 million fine for the company itself.