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Once Tesla accepts Bitcoin as a form of payment, it is expected to increase the demand for BTC to new heights that affects the market price directly.
In an SEC filing on Monday, Tesla Inc (NASDAQ: TSLA) announced that it invested $1.5 billion in Bitcoin (BTC). The mega-tech and automobile company also revealed that it intends to accept Bitcoin as a form of payment in the near future.
“As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds, and other assets as specified in the future. Thereafter, we invested an aggregate of $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future,” Tesla noted.
Tesla and Bitcoin (BTC)
The announcement has, ostensibly, coincided with the recent Bitcoin (BTC) and Dogecoin social media endorsement by Tesla CEO Elon Musk. Notably, Musk had put Bitcoin as his Twitter bio only to remove it after a few days. Later on, he continued with his former Dogecoin branding that resulted in the asset rallying astronomically due to FOMO.
Although the crypto market is not directly regulated by the United States government solely, Musk’s recent actions beg the question of his credibility. With over 46 million Twitter followers, his tweets have been associated with incredible volatility.
Tesla has however cautioned that it may revise the investment of its digital assets based on several factors. Among them is if the market price falls below the investment portfolio or if the digital asset technology is compromised and leaves the ecosystem vulnerable to attacks.
There has been speculation on Tesla’s involvement in the crypto industry, particularly Bitcoin. Previously, a Bitcoin ATM provided by LibertyX was cited at the Nevada Gigafactory. However, LibertyX indicated it was only used by Tesla employees.
Further, once Tesla accepts Bitcoin as a form of payment, it is expected to increase the demand to new heights that affects the market price directly. Meanwhile, other companies are expected to follow the same path as Tesla in the near future.
Notably, as a result of the announcement, the Bitcoin market price spiked over 13% hence a new all-time high of around $44k.
Bitcoin is now up approximately 344% in the past year, and 34%, 31%, and 13% in the past two weeks, seven days, and 24 hours respectively. Meanwhile, Tesla shares spike approximately 2.51% during Monday’s pre-market to trade around $873.59.