Tesla has invested $1.5 billion in Bitcoin and will soon be accepting cryptocurrency as a valid form of payment. Unsurprisingly, the digital token’s valuation surged as news broke, sending it past its all-time high of $44,000 and making a lot of investors incredibly happy.
CEO Elon Musk has boosted various cryptocurrencies in the past by doing little more than saying their name. For example, Dogecoin was co-founded by IBM and Adobe software engineers as the satirical alternative (hence the name) to other forms of digital currency. But it became the eighth-most valuable cryptocurrency after Musk started tweeting about it at the start of February.
While that could have been a trial to see if moving on Bitcoin would have a similar effect, it’s hard to imagine Tesla pouring its finances into the mix could have had any other effect. The automaker issued its annual report on Monday, noting that it had purchased $1.5 billion of the cryptocurrency as part of an earlier initiative to buy up alternative assets like digital coins and gold bullion.
As for how you’ll be paying for your next Tesla, details of the Bitcoin exchange haven’t been worked out as of yet. Its filing with the Securities and Exchange Commission only stipulates that the company hopes “to begin accepting bitcoin as a form of payment for our products in the near future … initially on a limited basis, which we may or may not liquidate upon receipt.”
Musk himself has suggested government-backed currencies are overhyped and that Bitcoin seems a viable alternative. He has also suggested that the digital coin is on the cusp of being endorsed by “conventional finance people.” This has been echoed other crypto investors, though they have plenty to gain by convincing others to buy in. But Tesla’s filing did not fail to exercise some amount of caution and acknowledged that the “long-term adoption [of cryptocurrencies] by investors, consumers and businesses is unpredictable” and open to digital attacks. We imagine that’s just in there for cover, as there are few forms of investing that are risk-free.
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