Tesla announced on Monday that it had bought $ 1.5 billion worth of bitcoin, according to a submission to the SEC.
The company said it bought the bitcoin for ‘more flexibility to further diversify and maximize the return on our cash’, according to the submission. In addition to the purchase, Tesla said it will also start accepting payments in bitcoin in exchange for its products. This would make Tesla the first major carmaker to accept bitcoin as payment.
The move has raised immediate questions about CEO Elon Musk’s behavior on Twitter in recent weeks, acknowledging that he has raised the prices of cryptocurrencies such as bitcoin and dogecoin by posting positive messages about them. and therefore encourage more people to buy.
Bitcoin prices rose to new highs on Monday after Tesla’s announcement, reaching a price of at least $ 43,200. Tesla shares rose more than 2% in pre-market trading. Tesla has warned investors about the volatility of bitcoin’s price in the SEC submission.
Tesla’s move Monday represents an investment of a significant percentage of its cash in the investment. The company has more than $ 19 billion in cash and cash equivalents on hand by the end of 2020, according to its most recent submission.
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