Tesla has announced on Monday that the company has invested $1.5 billion into the cryptocurrency, Bitcoin during a filing with the Securities and Exchange Commission. The reason behind the surprising move was the following:
“More flexibility to further diversify and maximize returns on our cash,” the company said.
Alongside this news, Tesla also announced that it would start accepting Bitcoin as payments for its cars, making it one of the very first car manufacturers to do such a thing. But questions have arisen when Elon Musk started discussing cryptocurrencies on Twitter such as Dogecoin and Bitcoin, encouraging a rise in value. By Musk simply adding a #bitcoin hashtag to his Twitter bio, this caused the currency to increase by 20%, while also pushing more people to invest in it.
A couple of days after this, he said on Clubhouse, a social media site, the following:
“I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”
Bitcoin has continued to rise thanks to Tesla’s announcement, racing a value of $44,200. Tesla shares also went up by 2.5% in premarket trading. However, Tesla has warned investors that Bitcoin is still incredibly volatile as an investment.
This move into the investment of Bitcoin from Tesla is a large one, with it being a large portion of its cash and cash equivalents, with the end of 2020 seeing Tesla with$19 billion in cash and equivalents.