Tesla will also accept payments in bitcoin
Tesla announced on Monday that the company has purchased $1.5bn worth of bitcoin.
Tesla has said it established its bitcoin holding for “more flexibility to further diversify and maximize returns on our cash,” in a filing with the Securities and Exchange Commission.
Furthermore, Tesla will be accepting payments in the form of bitcoin in exchange for its products.
The revelation has caused a surge in the price of the digital currency to a record high of $44,100.
Elon Musk has spoken out in favour of bitcoin on numerous occasions via his social media platforms. At the end of January the Tesla CEO caused the price of the crypto currency to jump up to $37,000 when he changed his Twitter bio to “bitcoin”.
Analysts are viewing the move by Tesla as a potential watershed moment in bitcoin’s journey.
“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,” Turner said.
Tesla’s investment into bitcoin is a significant portion of its overall cash holdings. According to Tesla’s most recent filing, the company has in excess of $19bn in cash or an equivalent.
The news means more of the same for bitcoin’s rising yet volatile price. At the beginning of 2020 one bitcoin was valued at under $10,000.
Investment bank JP Morgan has recently revealed a long-term price target of $146,000 for bitcoin.