Tesla CEO Elon Musk has recently established himself as a bonafide bitcoin lover. In January 2021, he added the #bitcoin to his Twitter bio, praised the token on Clubhouse, and has repeatedly engaged with the bitcoin community. Now, it appears that he is taking his bitcoin enthusiasm off Twitter and to his businesses.
It has been announced that Tesla has added a large amount of bitcoin to its corporate wallet and also plans to accept the cryptocurrency as a means of payment. This will make them the first major car manufacturer to accept cryptocurrency for product payment.
Tesla Loads Up On Bitcoin
On February 8, 2021, Tesla announced that it has bought a whopping $1.5 billion worth of bitcoin. In an official statement to the Securities and Exchange Commission in the United States, Tesla said that their reason for purchasing bitcoin was to gain “more flexibility to further diversify and maximize returns on our cash.”
They are not the only ones that have gotten in on bitcoin in recent times. A number of hedge funds and investment firms are buying up large amounts of bitcoin following its record-breaking bull run that saw the price of the digital asset reach over $40,000.
This influx on Tesla’s part was also accompanied by the announcement that they will start accepting bitcoin as a means of payment for their products “subject to applicable laws and initially on a limited basis.” This means that they will have the necessary liquidity for when they start taking bitcoin payments.
This move to bitcoin is no small feat on the part of Tesla. Besides a large number of tokens bought, the $1.5 billion represents almost 10% of their $19 billion cash flow as per their recent financial reports. Musk has said in the past that he believes in the power of bitcoin and the richest man in the world is clearly putting his money where his mouth is.
He has become popular among the crypto crowd and his public endorsement of bitcoin has been credited with helping its recent bull run. He was also publicly active during the GameStop saga in which Reddit users came together to inflate the price of GameStop stocks, bankrupting several hedge funds in the process. It has been speculated that Musk had a personal vendetta against hedge funds that had previously shorted Tesla stocks.