Bitcoin reached an all-time high on Monday after Tesla Motors announced it planned to start accepting the cryptocurrency as payment for its sought-after electric vehicles. In addition, Tesla said it had invested $1.5 billion in bitcoin last month.
"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," Tesla said in a securities filing.
"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," it added.
Reacting to the news, cryptocurrency markets were ecstatic, with Bitcoin reached all time highs of above $45,000, while other cryptocurrencies like Ethereum and Ripple also went up in value.
The announcement comes ten days after Musk single-handedly drove up the price of Bitcoin by adding the hashtag “Bitcoin” to his bio. Musk has over 46 million followers on the platform, and has acquired a reputation of being at odds with regulators, repeatedly clashing with Securities and Exchange Commission (SEC) and increasingly pitching for decentralised technologies like bitcoin.
It comes as Musk’s moves on Twitter align with the erratic effect of the subreddit WallStreetBets, which has pushed the stock price of Gamestop to all time highs in a bid to combat efforts by hedge funds to short it. When retail investment platform Robinhood temporarily limited the ability of retail investors to buy more options, Musk was among those who criticised the control
Bitcoin isn’t the only cryptocurrency Musk has been promoting: He has issued several tweets in support of the ‘meme’ coin, Dogecoin, whose value has shot up over 800 per cent over the last few weeks. Perhaps ironically, but not entirely, Musk has pitched Dogecoin as the “future currency of Earth”.