Tesla now holds Bitcoin as a reserve. Therefore, the company could now accept Bitcoin as a means of payment without having to convert it.
Tesla to accept bitcoin as payment soon
Elon Musk’s company Tesla Motors is following the lead of MicroStrategy and other companies and investing some of its company assets in Bitcoin (BTC).
On Monday, the company filed a notice with the US Securities and Exchange Commission (SEC) saying it had purchased a total of US$1.5 billion in Bitcoin. These are to be held as an Crypto Engine investment and store value for its surplus cash. It is currently unknown what the average purchase price was and how many BTC the company bought. Tesla’s investment guidelines were updated at an undisclosed date in January 2021. This suggests that Tesla could hold between 35,900 and 45,500 BTC. That would equate to an average price of US$42,000 or US$33,000. Given the bitcoin price trend in recent weeks, the estimate of around 45,500 BTC is more likely.
Under the policy, Tesla intends to offer its customers the option of buying its products with Bitcoin, according to the document. Unlike other companies, the Bitcoin are not to be liquidated as soon as possible. This means that they form the reserves.
In addition to Bitcoin, Tesla’s new investment policy also allows the purchase of gold bars and gold exchange-traded funds. Famed gold advocate and Bitcoin sceptic Peter Schiff sees this fact as cold comfort. He suspects that Tesla’s BTC investment is already being sold as the market reacts to the news.
Bitcoin hits new all-time high above $43,000: Tesla buys billions in BTC
Shortly before, Elon Musk entered the world of cryptocurrency. After initially owning only about 0.25 BTC given to him by a friend, Musk warmed up to cryptocurrencies and Bitcoin in the wake of the 2021 bull run.
At one point he referred to himself as the “CEO of Dogecoin” and has recently written about the meme coin. This sparked some criticism from prominent Bitcoin fans who considered it irresponsible. Nevertheless, it seems that Musk’s openness towards Bitcoin has far more tangible consequences than just a change in his Twitter bio.