Since the year started, Tesla has remained at the fore of the media, and the buzz just got bigger with the company’s acquisition of $1.5 billion worth of Bitcoin (BTC).
The company announced its latest venture into cryptocurrency via a filing with the Security and Exchange Commission (SEC).
According to the electric automobile company, the purchase of BTC allows for “more flexibility to further diversify and maximize returns on cash.”
Likewise, the new acquisition allows Tesla to “invest cash in gold bullion and gold exchange-traded funds among other assets…We believe our bitcoin holdings are highly liquid,” Tesla said.
Quartz: Tesla Founder, Elon Musk
Although this development seems to be driven by Elon Musk, Tesla’s founder’s keen interest in cryptocurrency; it was said to be largely approved by the company’s board committee.
Tesla to accept BTC as a mode of payment moving forward
The company strongly believe in BTC is a scalable cryptocurrency.
It also plans to start accepting it as a payment alternative for its wide range of product lines moving on.
Undoubtedly, this new development makes Tesla the first major automobile company to fully accept cryptocurrency.
However, this move by Tesla is not surprising, considering Elon Musk has been actively hyping digital currency since the year commenced.
Recall that the now wealthiest man on earth has been advocating for Dogecoin and Bitcoin, whose market values were influenced continuously.
The future currency of Earth
— Elon Musk (@elonmusk) February 6, 2021
Ð is for Ðogecoin! Instructional video.https://t.co/UEEocOfcTb
— Elon Musk (@elonmusk) February 8, 2021
About two weeks ago, Musk added #bitcoin to his Twitter bio, further indicating the billionaire’s keen interest in the cryptocurrency.
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This is aside from the fact that Musk is now fond of influencing stock price using his most-preferred social media channel – Twitter.
For reference, check out this story about how Elon Musk is influencing stock price shifts with a simple tool as tweets.
Musk, while addressing a question about BTC on the social-networking app Clubhouse, stated that:
“I think bitcoin is really on the verge of getting broad acceptance by sort of the conventional finance people.
“I gotta watch what I say here ‘cause some of these things can really move the market,” Musk added, restraining himself on what and what not to say.
In the latest development, the serial entrepreneur has shown a stronger commitment to his newly found ambition via his company.
Bitcoin reaches all-time high following Tesla’s huge purchase
Elon Musk’s tweets about BTC often influence the market value, not to mention investing a considerable amount as $1.5 billion.
Following the announcement of Tesla’s BTC purchase, the digital asset’s market value leapt to an all-time high of $44,000 from a daily open of $39K.
That’s a whopping 5K plus difference in a couple of minutes, making for about a 12% increase; apparently, the biggest leap for a digital asset in such a short-time trading window.
Similarly, Tesla’s shares also witnessed a boost within the hours, as it moved up more than 2.5 percent during pre-market trading.
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Considering the high volatility in trading bitcoin, Tesla cautioned investors in its SEC filing about potential risks.
Tesla’s BTC investment makes up almost 2% of the digital currency’s current market volume and a pinch of the market cap pegged at $86.34 Bln and $820.5 Bln, respectively.
Overall, Tesla’s latest investment in BTC will send a stronger message out there, especially to those who are still sceptical about cryptocurrency’s scalability in general.
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