US carmaker Tesla said it has bought $1.5 billion worth of cryptocurrency Bitcoin, and it will begin accepting it as payment for its products, according to a filing on Monday.
“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,” the firm said in its filing to the US’ Securities and Exchange Commission (SEC).
“As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets … Digital assets are considered indefinite-lived intangible assets under applicable accounting rules,” it added.
Price of Bitcoin soared more than 12% after Tesla’s announcement to reach a new all-time high of $44,749 at 8.26 a.m. EDT (1326 GMT).
The move makes Tesla the first major American automaker to accept Bitcoin as a payment method, as more US firms offer customers to make transactions in virtual coins. Online payment provider PayPal announced in October it will allow its customers this year to use cryptocurrencies to shop at 26 million merchants on its network.
Tesla also warned investors about the high volatility of virtual coins by noting in the filing “digital assets may be subject to volatile market prices, which may be unfavorable at the time when we want or need to liquidate them.”
CEO Elon Musk’s behavior has been rising eyebrows for investors as he showed support for two cryptocurrencies through his social media account in recent weeks.
Musk writing Bitcoin on his Twitter profile page on Dec. 29 pushed its price to over $38,000 in a single day, while repeatedly posting tweets about Dogecoin made it increase by more than 800% since Jan. 28.
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