Bitcoin surged to an all-time high and jumped as much as 15% after Elon Musk’s Tesla Inc announced on Monday that it has invested $1.5 billion, becoming the biggest company yet to back the cryptocurrency. This is the first time the prices in Bitcoin exceeded more than $44,000.
The investment news was confirmed by Tesla’s 10-K report with the United States Securities and Exchange Commission (SEC) on Monday. Tesla also said it would begin accepting the digital token as a form of payment for its electric cars.
According to its annual 10-K report filed with the US Securities and Exchange Commission, Tesla announced the investment saying, “We invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. 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.”
Assuming that Tesla and Elon Musk bought Bitcoin over the last couple of weeks, we can use an estimated purchase price of $35,000.
If that is the case, they would already be up about 25% on the $1.5 billion purchase.
It is smart business for corporations to own Bitcoin.
— Pomp 🌪 (@APompliano) February 8, 2021
We are just getting started 🚀
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) February 8, 2021
Before investing in bitcoin, the company updated its investment policy to make it feasible for this opportunity.
“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,” Tesla said in the report.
“We believe our bitcoin holdings are highly liquid. However, digital assets may be subject to volatile market prices, which may be unfavorable at the time when we want or need to liquidate them,” the company wrote. Last week, Musk caused cryptocurrency Dogecoin to surge by 50 percent by a tweet where he shared a meme.
The future currency of Earth
— Elon Musk (@elonmusk) February 6, 2021
Dogecoin is the people’s crypto
— Elon Musk (@elonmusk) February 4, 2021
Why did Tesla invest in Bitcoin?
The announcement has come amid renewed interest shown by Musk in cryptocurrency and requests from Tesla customers for accepting bitcoin for buying the cars. Elon Musk was recently also seen using #bitcoin to his Twitter profile.
Cryptocurrency Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto, and it began to use in 2009