Bitcoin at record level after Tesla’s 1.5 billion purchase

Bitcoin at record level after Tesla’s 1.5 billion purchase

Bitcoin Business
February 9, 2021 by 99pigs
Tesla has bought bitcoin for 1.5 billion dollars according toe SEC filings. At the same time, it appears that Elon Musk's company will "soon" accept bitcoin as a means of payment for its products. The news caused the bitcoin price to rise steeply to new record levels above 42,000 dollars.
Bitcoin Cryptocurrency Money  - TheDigitalArtist / Pixabay

The electric car manufacturer Tesla has bought bitcoin for 1.5 billion dollars, according to documents submitted to the US Financial Supervisory Authority SEC.

In recent weeks, Tesla CEO Elon Musk has attracted attention by making a number of statements about various cryptocurrencies. Among other things, he added the subject tag “#bitcoin” to his biography on Twitter, which led to a big price increase.

– We expect to be able to start receiving payment in bitcoin for our products in the near future, Tesla writes further in the SEC submission.

Tesla earlier this month announced the purchase of $1.5 billion of bitcoin in an effort to “further diversify and maximize” the return on its cash. Tesla ended 2020 with $19.38 billion in cash and cash equivalents, as noted in an SEC filing.

“After that, we invested a total of $ 1.5 billion in bitcoin.”  – Tesla.

Tesla’s new policy on Bitcoin

In January 2021, Tesla updated its investment policy to provide “more flexibility to further diversify and maximize cash returns that are not required to maintain sufficient business liquidity.”

The policy meant that Tesla could invest parts of the cash in certain specific “alternative reserve assets”, the company writes.

Furthermore, Tesla warns that digital assets may be unfavorable given the high volatility in market pricing “which may be unfavorable when we want or need to liquidate them”.

Teslas move on Bitcoin

Dogecoin and Bitcoin are hyped by Elon Musk and TeslaTesla’s move into bitcoin represents an investment of a significant portion of its cash in the purchase. The company had more than $19 billion in cash and cash equivalents on hand at the end of 2020, according to its most recent filing.

The moves raise questions around CEO Elon Musk’s recent behavior on Twitter, where he has been attributed for increasing the prices of cryptocurrencies like dogecoin and bitcoin by posting positive messages that have encouraged more people to buy the digital currencies.

Two weeks ago, the billionaire Tesla owned added the hashtag #bitcoin to his Twitter bio, a move that helped to briefly push up the price of the cryptocurrency by as much as 20%. Two days later, he said on the social medial chat site Clubhouse: “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”

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