Digital Assets: Tesla Converts $1.5B Of Surplus Cash To Bitcoin
The news lit a rocket under bitcoin, which hit an all-time high of $44,802.
Bitcoin reacted highly bullishly to Monday’s SEC filing by Elon Musk’s Tesla (NASDAQ: TSLA) which showed the EV-maker had invested $1.5 billion in the leading cryptocurrency. (Coin Telegraph)
“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. As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets,” Tesla said in its 10-K report for the fiscal year ended December 31, 2020.
“Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy.”
Tesla may have borrowed a leaf from organizations such as Microstrategy (NASDAQ: MSTR), and Square Inc (NYSE: SQ). These corporates have invested millions of dollars of corporate reserves in bitcoin. They seek to escape the diminution in the value of their reserves due to the debasement of the dollar. Analysts fear pressure on the currency due to incessant money-printing arising from the stimulus and large budgetary deficits.
It said elsewhere in the filing that it intended to hold these digital assets “in the long term.”
Tesla to accept bitcoin as payment for its cars
In another momentous announcement for the crypto industry, Tesla announced that it would likely begin accepting bitcoin for its sales. This announcement is a huge shot in the arm for the global adoption of bitcoin.
“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,” Tesla said.
Bitcoin goes parabolic
The Tesla news triggered a huge spurt in bitcoin because it was a very positive move in favor of its growing adoption. It also reinforced the view that corporates and institutions have been majorly responsible for bitcoin’s rally in recent months because they accept the crypto as a viable investment.
PayPal (NASDAQ: PYPL) too set off a rally in BTC when it announced in October that it was opening up its platform to cryptos.
As this is being written BTC is up over 14% at $43,608.40.
Earlier, it touched a fresh all-time high of $44,801.87.
Related Story: Paypal Sends Bitcoin Into Orbit
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