Early Monday morning, Tesla announced that the company had bought 1.5 billion in Bitcoin.
In a regulatory filing the company said it will accept Bitcoin payments “subject to applicable laws and initially on a limited basis.” The company joins a growing group including; Microsoft, Overstock, Virgin Galactic and Norwegian Air, who accept Bitcoin.
Although Bitcoin transactions will be limited to start, this move makes Tesla the first automaker to accept a cryptocurrency. It is unclear what transactions will be allowed with Bitcoin at the moment. The company notes that the move is to diversify and maximize returns on the company’s cash.
As of the end of 2020, the company had $19 billion in cash and cash equivalents on hand.
Unsurprisingly, many are questioning the move, and the legality around Tesla’s CEO Elon Musk’s recent tweets. Musk, who previously got in trouble with the SEC over tweets, tweeted about Bitcoin and Dogecoin over the past few weeks. As well, his current Twitter bio includes #Bitcoin.
This morning, Tesla shares (TSLA) had already increased by 2%, and Bitcoin price surged to over $44,200.
Disclaimer: Scott does not own shares of Tesla (TSLA), and has no plans to initiate a position within 72 hours.
