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Tesla Acquires Bitcoin Worth $1.5 Billion

Blockchain

Fintech

News

Feb. 8, 2021, 2:55 p.m.

Tesla, today announced it has bought $1.5 billion worth of bitcoin.

This move has caused a 15% surge for bitcoin with its prices exceeding $44,000 for the first time.

In a filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.”

Tesla also said it will start accepting the digital token as a form of payment for its electric cars. That would make Tesla the first major automaker to accept to do so.

“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity,” Tesla said in a 10-K filing with the U.S. markets regulator.

“Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt,” the filing continued.

The billionaire had been spotted recently been more vocal about digital assets on his social platform.

Two weeks ago, the billionaire Tesla owned added the hashtag #bitcoin to his Twitter bio, in 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.”

Tesla’s move into bitcoin represents an investment of a significant percentage of its cash in the investment. 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.

Meanwhile, several high-profile Wall Street investors, including Stanley Druckenmiller and Paul Tudor Jones, have embraced bitcoin. Famed investor Bill Miller, founder of Miller Value Partners, in a letter to clients earlier this month published on the firm’s website, reaffirmed his bullish outlook on bitcoin.

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Verny Joy Author

Verny loves to write poetry, fiction and quotes. Her love for writing landed her in journalism. She loves gadgets and travelling to explore new places.

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