Tesla Buys Bitcoin
On yesterday’s Crunch, we talked about how Elon Musk, the CEO of Tesla and SpaceX, posted tweets about Dogecoin as it skyrocketed to an all-time high of more than 8 cents. If his tweets didn’t convince you he loves cryptocurrency, maybe this will. On Monday, Tesla bought $1.5 billion worth of Bitcoin and announced they would start accepting the cryptocurrency as a form of payment.
Tesla is the first automaker to accept Bitcoin, and after the company’s announcement, Bitcoin soared to an all-time high of more than $46,000 per coin.
Late last December, business intelligence company MicroStrategy announced they had also purchased over $1 billion in Bitcoin. That same December, Michael Saylor, the co-founder of MicroStrategy, tweeted to Elon Musk, recommending “If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC.” Elon subsequently replied, “Are such large transactions even possible?”
With all the cryptocurrency talk on social media, it’s not surprising that Tesla finally decided to allocate some capital towards Bitcoin. Tesla said it bought Bitcoin “for more flexibility to further diversify and maximize returns on our cash.”
In the last three months, Bitcoin has gained more than 180% — it is a high-growth investment vehicle. Companies are starting to recognize the opportunity to use Bitcoin as a form of payment and use it as an investment vehicle. Don’t be surprised if we start to see more companies delve into cryptocurrency.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.