The cryptocurrency space has witnessed another massive addition as American electric vehicle and clean energy company, Tesla, on Monday disclosed that it has bought $1.5 billion worth of Bitcoin.
Tesla, according to a filing with the United States Securities and Exchange Commission (SEC), said it has purchased $1.5 billion worth of the top crypto.
The statement noted that the electric vehicle firm stated that it bought the digital currency in a bid to achieve more flexibility as well as further diversify and maximize returns in its funds.
Tesla’s new decision to invest a large percentage of its cash in Bitcoin has been recieved with excitment by the crypto community. According to the company last balance sheet, it had more than $19 billion in cash and cash equivalents on hand at the end of 2020.
It is worth noting that Tesla investment give cryptocurrency more legitimacy, as some individuals on Wall Street have recently argued that its value is an overpriced bubble.
Bitcoin rallies due to Tesla investment
Bitcoin rallied after Tesla announced its investment of $1.5 billion. The top crypto rose as high as 16% attaining a new all-time high of $44,795.20 and the total crypto market capitalization went up by 10% to almost $1.32 billion.
The market growth has raised questions around Tesla CEO Elon Musk’s recent behavior on Twitter, where he has been credited for increasing the prices of cryptocurrencies like bitcoin and dogecoin by posting positive messages that have encouraged more people to buy the digital currencies.
Previously, Musk added the hashtag #bitcoin to his Twitter bio, the move briefly pushed up the price of the cryptocurrency by as much as 20%. Days later, he disclosed on the social medial chat site Clubhouse, “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”
You can now purchase Tesla cars with bitcoin
In addition to purchasing $1.5 billion worth of Bitcoin, Tesla also noted that it will now begin accepting Bitcoin as a means of payment for its products.
The American electric vehicle producer, which is currently the most valuable car company on the stock market said it would “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.”
Notably, this would make Tesla the first major automaker to embrace cryptocurrency and accepts Bitcoin as a form of payment.
Additionally, Tesla will be join a load of global organisations and financial institution that has recently embrace digital cuurency. Among them are, MassMutual who in 2020 announced that its purchase of $100 million in Bitcoin for its general investment account.
MicroStrategy also invested in Bitcoin. It recently purchased 16,796 Bitcoin for $175 million, noting it previously owned 21,454 BTC. The company recently announced it was planning on buying another $400 million in bitcoins.
Grayscale Investments according to a press statement has surpassed the milestone of $30 billion in net crypto assets under management (AUM). The investment firm disclosed that it has in it Grayscale Bitcoin Trust over $24 billion in AUM, while the Ethereum trust has over $5 billion in AUM.
Crypto space reaction to Tesla investment
The entire crypto space has welcomed the American electric vehicle and clean energy firm. MicroStrategy boss, Michael Saylor via his official Twitter handle welcomed the idea noting that the entire world would benefit from the initiative.
He further noted that “Tesla $TSLA has de-risked the acquisition of #bitcoin by public companies and accelerated the digital transformation of corporate balance sheets. Treasurers are now thinking about how to convert a non-performing asset into the best performing asset.”
Binance CEO Changpeng Zhao in his statement called on more people to embrace cryptocurrency. According to him, “Today marks the day that soon after, if you are a corporate treasury and don’t understand or hold #bitcoin, you might just get fired on the spot.”
“If you bought #bitcoin before today, congrats on “front running” Elon Musk. If you haven’t bought yet, remember he still have a lot more fiat than the mere $1.5 billion. Not financial advice,” he added.
Similarly, Crypto trader and investor Scott Melker via his official Twitter handle explained that anyone who own Tesla stock not indirectly own Bitcoin as well.
“If you own Tesla stock, you now have exposure to #Bitcoin, whether you like it or not,” he tweeted.
Cynthia Lummis, a Senator representing Wyoming also called on Tesla CEO to invest in the US state. Adding that the state is a crypto-friendly state.
Tyler Winklevoss, co-founder of Gemini tweeted that “When Elon Musk puts the $TSLA balance sheet into #Bitcoin, we’ll have to change the BTC rallying cry from “to the moon!” to “to Mars!”