FINALLY! Tesla Buys Bitcoin and Sends it Skyrocketing

Today Tesla announced that it purchased $1.5B in bitcoin putting the world of cryptocurrency and its follower into a frenzy as Bitcoin pushed to an all-time high. The cryptocurrency is currently approaching $43,000 but went as high as $44,000 this morning. Tesla announced the move in an SEC filing today along with its plans to accept the currency as a form of payment in exchange for services and products.

According to its 10-K that was released this morning:

“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. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, 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. Thereafter, 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.

Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale. As we currently intend to hold these assets long-term, these charges may negatively impact our profitability in the periods in which such impairments occur even if the overall market values of these assets increase.”

It is no secret that the Tesla CEO is on board with cryptocurrency particularly Bitcoin, although his Twitter has been plentiful with Dogecoin content, although some think it facetious. Musk also exchanged a few words on Twitter with Michael Saylor who has invested over $1 billion of his company, MicroStrategy’s funds in Bitcoin, encouraging his fellow CEO to convert the $TSLA balance sheet from USD to #BTC.

Musk voiced his support of the cryptocurrency during his Clubhouse chat last week and added the #bitcoin hashtag to his Twitter bio. Now, Tesla plans to accept bitcoin as a form of payment for its products and services as well.

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