On Monday 8th February 2021, in an SEC filing Tesla bought $1.5 billion worth of bitcoin.
The company said it bought bitcoin for “more flexibility to further diversify and maximize returns on our cash.” It also said it may invest a future portion of its assets in digital assets and that it will accept bitcoin as payment for products “subject to applicable laws and initially on a limited basis.”
The news caused the price of bitcoin to surge 14% to about $44,000 and on track to having the best day since April last year according to coindesk. Bitcoin has done impressively well in the past year with its price quadrupling.
CEO Elon Musk has been talking up bitcoin as well as meme-inspired token dogecoin in recent tweets, which many believe drove the recent runup in these assets.
Tesla’s investment in bitcoin is the latest sign that the volatile cryptocurrency is being widely embraced. Last year, Fidelity Investments, Square and PayPal announced big moves in the space, allowing their customers to be involved in the digital asset.
“TSLA hasn’t historically been a company to shy away from publicity, so some will write off today’s announcement as a marketing stunt, but at $1.5 billion, it would be a pretty big stunt,” Bespoke Investment Group said in a note. “Also, while it’s easy to forget, TSLA is one of the largest companies in the world.”