Elon Musk’s Tesla Inc. said that it has acquired $ 1.5 billion in bitcoins in January and that it could accept the world’s No. 1 digital asset for payment in the future.
Tesla TSLA,
“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 move comes as Musk has recently been a more vocal champion of digital assets on his social platforms.
In late January, Musk tagged the cryptocurrency in his Twitter biography and then added the hashtag #bitcoin to his Twitter bio, he then tweeted, “In retrospect, it was inevitable.” And earlier this month, Musk tweeted “doge” without further comment, referring to the digital-asset meme asset dogecoin.
Tesla becomes one of the bigger companies to invest in bitcoins and allow payments via the digital asset that was created just in 2009.
“While many on the Street have discussed the prospects of this move for Tesla, this morning’s news formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto,” wrote Wedbush analyst Dan Ives, in a Monday research note.
However, other mainstream companies have begun to make headlines centered on their interest in bitcoins and making virtual assets a part of their balance sheets.
Back in 2020, software company MicroStrategy MSTR,
Microstrategy’s move has raised the question as to whether other companies might consider putting some of their reserve assets into bitcoin.
“Ultimately, investors and other industry watchers will be watching this closely to see if other corporations follow the lead of Tesla on this crypto path or on the other hand does it remain a contained few names that make this strategic jump around bitcoin,” Ives wrote.
A record rally in bitcoin has been largely attributed to interest from institutional investors and corporations. PayPal Holdings Inc. PYPL,
Bitcoin’s price gains also are drawing attention to the asset, investments experts say, as a run-up in the Dow Jones Industrial Average DJIA,
Bitcoin prices have surged 50% so far in 2021. Meanwhile, the S&P 500 has gained 3.5%, the Dow has gained 1.8% in the year to date, while the technology-laden Nasdaq Composite Index COMP,
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.
