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Wednesday, June 16, 2021

Elon Musk and Tesla Light a Fire Under Bitcoin

Tesla has invested $1.5 billion in bitcoin and plans to soon accept the cryptocurrency from customers who purchase its electric cars, the company said Monday.

The announcement from the automaker, in a US Securities and Exchange Commission (SEC) filing, is a sign of confidence in the cryptocurrency that regulators are concerned could be used for illegal transactions.

“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash,” Tesla said in announcing the $1.5 billion investment.

As a result “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.”

Tesla will also “begin accepting bitcoin as a form of payment for our products in the near future,” the company added.

The announcement, which helped lift the cryptocurrency to a new all-time high, came just days after Tesla chief Elon Musk briefly changed his Twitter bio to simply read “#bitcoin.”

Prices of Bitcoin surged to $43,725.51 around 1300 GMT, before cooling slightly to $42,352.

Tesla acknowledged in the SEC filing that digital assets “may continue to be highly volatile” and vulnerable to “malicious” technology-based attacks.

Regulators and central bankers have reacted cautiously to the latest surge in bitcoin prices.

During her confirmation hearing, newly-installed Treasury Secretary Janet Yellen said cryptocurrencies are vulnerable to illicit finance.

S. Jack Heffernan Ph.Dhttps://www.shayneheffernan.com
S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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