Tesla sends bitcoin soaring with $1.5 billion investment

Reuters

Posted at Feb 08 2021 09:58 PM

Tesla Inc. said on Monday it had invested around $1.5 billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a 7% jump in the electronic currency.

The announcement came after two weeks in which comments from Chief Executive Elon Musk encouraged small-time investors to buy bitcoin and meme-based digital currency Dogecoin as well as shares of US video game chain GameStop

Musk said a week ago in a tweet that bitcoin was "on the verge" of being more widely accepted among investors.

Analysts said the move by Tesla was liable to prove a game changer for the currency.

"I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move," said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.

"One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla (or even just an S&P 500 fund) has exposure to it as well."

Tesla said in a filing the decision was part of its broad investment policy as a company and was aimed at diversifying and maximizing its returns on cash.

It said it had invested an aggregate $1.5 billion in bitcoin under the changed policy and could "acquire and hold digital assets from time to time or long-term".

Bitcoin surged more than 10% on Monday to a record high after Tesla's disclosure.

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