Here comes the headline most of us expected in 2021: Elon Musk’s Tesla has made a huge investment in Bitcoin.
In an annual report filed with the U.S. Securities and Exchange Commission for the year ending Dec. 31, 2020, Tesla mentioned:
“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.”
Following are the key points from Tesla report:
- The policy included investment in “alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.”
- “Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term,” Tesla said.
- We expect to begin accepting bitcoin as a form of payment for our products in the near future,” Tesla Said. The firm mentioned that it would initially be on a “limited basis, which we may or may not liquidate upon receipt.”
The move comes as Musk has recently been a vocal champion of digital assets, in particular Bitcoin and Dogecoin, on his social platforms.
Led by Bitcoin, cryptocurrencies are gaining traction with more mainstream investors. The euphoria boosted the total market value of all cryptocurrencies above $1 trillion for the first time earlier in January. Moreover, the total market capitalization of all cryptocurrencies reached $1.2 trillion for the first time on February 6, 2021 as Ethereum surged to a record high, and several other prominent cryptos including Bitcoin also exhibited strong surge in valuation.
The News Gets Corporate Attention
Corporate leader were quick to comment on this news. Michael J. Saylor, Founder and CEO of MicroStrategy, congratulated Elon Musk in his tweet:
MicroStrategy is amongst one of the big enterprise investors having invested in Bitcoin. MicroStrategy made a mega Bitcoin purchase worth $1.125 billion last year, considering it “a dependable store of value”.
Bitcoin Price Action
The big announcement instantly reflected in the Bitcoin price, which surged 10 percent within 1 hour of this news. Bitcoin price surged to $44,000 from around $39,000. This is a real big announcement which is going to further boost the cryptocurrency market.