Tesla Buys $1.5 Billion in Bitcoin, Says It Will “Soon” Accept It as Form of Payment
Written by
Yaël Bizouati-Kennedy
Edited by
Charlotte McMullen
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Tesla CEO Elon Musk bought $1.5 billion in bitcoin and said the company would begin accepting the cryptocurrency “as a form of payment for our products in the near future,” according to a Tesla Securities and Exchange Commission filing.
See: One Hashtag from Elon Musk Makes Bitcoin Spike in Minutes
Find: Mark Cuban: “Bitcoin is Exactly like the Dot Com Bubble”
On January 29, Musk added #bitcoin to his Twitter bio, prompting the cryptocurrency’s value to jump once again, standing at $38,500 that day — an 18% jump.
Last month, Tesla updated its investment policy to have more flexibility to “further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity,” according to the SEC filing.
As part of the policy, and in addition to the $1.5 billion in bitcoin, the company said it may invest in alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets.
See: Why Some Money Experts Believe In Bitcoin and Others Don’tFind: Crypto Bubble Brings a Curious Problem for Investors
“The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable,’ Tesla said in the SEC filing.
“Finally, as intangible assets without centralized issuers or governing bodies, digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets. While we intend to take all reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we create or implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be harmed,” it added.
Just last week, Musk, who two days prior had proclaimed he would be “off Twitter for a while,” sent a series of tweets about Dogecoin, sending the cryptocurrency to spike 46% midday.
See: Musk Tweets Again and Dogecoin – a Bitcoin Rival – SkyrocketsFind: Apple, Facebook, Tesla Beat Revenue Expectations, Apple Breaks Record
Last month, Tesla, which became the newest S&P 500 member in December 2020, missed the consensus fourth-quarter earnings-per-share estimate of $1.03, as reported by Seeking Alpha, reporting $0.80 EPS in its earnings statement. However, the company beat the revenue estimate of $10.38 billion, reporting $10.74 billion in revenue, a 46% increase year over year.
“This past year was transformative for Tesla. Despite unforeseen global challenges, we outpaced many trends we see elsewhere in the industry as we significantly increased volumes, profitability and cash generation,” the earnings statement noted.
The company said it produced and delivered half a million vehicles in 2020.
More From GOBankingRates:
- These Are the Best Banks of 2021 – Did Yours Make the Cut?
- 36 Ways To Save For Your Emergency Fund and Any Unexpected Situations
- Top 100 Banks Leading the U.S. in 2021
- 35 Ways To Slash Your Car Costs
