In late January, Tesla CEO Elon Musk sent cryptocurrency Bitcoin surging, after he added the digital currency’s hashtag to his Twitter bio, along with a cryptic message, “in retrospect, it was inevitable.” Now, we may know why.
In Tesla’s Form 10-K filing with the Securities and Exchange Commission (SEC), the company revealed it had purchased $1.5 billion of Bitcoin and will soon accept the cryptocurrency as a form of payment in the future (via CNBC).
In retrospect, it was inevitable
— Elon Musk (@elonmusk) January 29, 2021
“We hold and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss,” reads one section of the SEC filing.
“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,” explained Tesla.
“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,” added the company.
Tesla also warns that cryptocurrencies “have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties.”
“Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed,” concluded Tesla.
Musk recently said in an interview on the audio app Clubhouse, he was a “supporter of Bitcoin”.
If you have a huge Bitcoin balance sitting around, you may be able to buy a Tesla with it in the future. Now that is forward-thinking on Musk’s part, yet again.
Shares of Bitcoin have surged 11% on the news, with one ‘share’ now worth a staggering $43,241 USD as of writing.
