Tesla and SpaceX CEO Elon Musk has announced that he is a Bitcoin supporter. The news was made public today in an SEC filing, where Tesla disclosed that it has acquired $1.5 billion in bitcoin. Also, the company plans to accept Bitcoin in the near future as a form of payment for its cars.
What Happens Now to Bitcoin
After the news, the price for the cryptocurrency surged to a record above $43,000. Further, Elon Musk said that Bitcoin is “on the verge of getting broad acceptance by conventional finance people.”
Bitcoin is not the only cryptocurrency that caught Elon’s attention. Recently, he said that sometime he makes jokes about the popular meme-friendly cryptocurrency Dogecoin. Even though Dogecoin was “made as a joke,” Musk mentioned on the social audio app Clubhouse that it would be the most “entertaining and ironic outcome,” if DOGE became the “currency of [E]arth in the future.”
Why is Elon Musk Investing in cryptocurrency
In December 2022, Elon Musk asked about the possibility of converting “large transactions” of Tesla Inc’s balance sheet into bitcoin. The conversation was between Musk and a well-known advocate for the digital currency.
“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”
“Are such large transactions even possible?” Musk replied to Saylor.
Michael Saylor is the chief executive officer of MicroStrategy Inc. In the end, he suggested to Elon to make the move: “Yes. I have purchased over $1.3 billion in #BTC in past months & would be happy to share my playbook with you offline…”
If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.— Michael Saylor (@michael_saylor) December 20, 2020
Tesla SEC filing
In its SEC filing, Tesla mentioned that earlier this year it “updated [its] investment policy to provide [it] with more flexibility to further diversify and maximize returns on [its] cash that is not required to maintain adequate operating liquidity,”.
As a result, the company has the option of putting cash into “certain alternative reserve assets”. It may include “digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.”
Is Tesla going to accept Bitcoin as payment
Tesla announced that the company might accept Bitcoin as a valid payment method for its cars. It’s no surprise the company thinks about it. For a while, Tesla customers called on Elon to accept Bitcoin for vehicle purchases. Even more, he updated his Twitter bio, to simply say, ‘#Bitcoin‘ and to show support for the cryptocurrency.
“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”.