Tesla Plans to Begin Accepting Bitcoin as Payment
(Newswires) — Tesla plans to begin accepting bitcoin as payment in the near future, the electric-car maker said in a regulatory filing.
The Silicon Valley car maker also said that it has invested $1.5B in the cryptocurrency, after updating its investment policy in January to diversify and maximize cash returns.
Chief Executive Elon Musk has described himself as a supporter of bitcoin. “I think bitcoin is really on the verge of getting broad acceptance by sort of the conventional finance people,” he said last week on the social networking app Clubhouse.
Tesla shares rise 2.1% premarket and bitcoin prices have risen 8% on the news.
👉 Bitcoin jumped 16% to all-time highs of $44,795.20 on Monday.
👉 The surge higher comes after Tesla disclosed in a SEC filing on Monday that it purchased $1.5 billion of bitcoin.
👉 Tesla expects to begin accepting bitcoin as a form of payment for its products in the near future.
The electric vehicle maker said in its annual 10-k filing on Monday that it bought $1.5 billion worth of bitcoin in January, and it plans to begin accepting the cryptocurrency as a form of payment in the near future.
“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,” the filing said.
Tesla isn’t the first firm to convert a portion of its cash into bitcoin, with MicroStrategy adopting that policy over the past year, making it a de facto bitcoin trading vehicle.
Square also acquired $50 million worth of bitcoin last Fall, and PayPal recently opened its services to cryptocurrencies.
The Tesla filing went on to say, “We may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.”
Another digital asset that has caught Musk’s eye in recent days has been Dogecoin, a cryptocurrency based on a dog meme. Tweets from Musk backing Dogecoin last week have led to a more than doubling in price for the cryptocurrency.
But there are risks associated with buying cryptocurrencies, which are laid out in Tesla’s SEC filing.
“As intangible assets without centralized issuers or governing bodies, digital assets have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets.”
With those risks in mind, Tesla said that when it eventually accepts bitcoin as a form of payment for its products, it may or may not liquidate it upon receipt, according to the filing.