After Elon Musk, the richest person in the world, changed his Twitter bio to “bitcoin,” attention and the price surged.
Elon Musk’s multi-billion dollar company, Tesla, has purchased an aggregate $1.5 billion of BTC and will begin to accept the cryptocurrency as payment, per a financial performance report filing with the U.S. Securities and Exchange Commission for the fiscal year ended on December 31, 2020.
Per the filing, in January 2021 the company updated its 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.” This update was officially approved by Tesla’s audit committee of its board of directors, and then the buying had begun.
Also according to the filing, Tesla will begin accepting bitcoin as a form of payment for its goods and services in the future, though it “may or may not liquidate upon receipt.” As many see bitcoin as a long-standing store of value, including an increasing wave of corporations, it would make sense for the company to hold onto the BTC instead of selling it for fiat. The filing indicated that Tesla does “intend to hold these assets long-term.”
It’s likely that Tesla’s acceptance of bitcoin will garner additional sales, as many within the Bitcoin community are fond of the company. The price of BTC surged last month when Musk changed his Twitter profile to “#bitcoin.” And Bitcoiners were further engaged when he took to Clubhouse to explicitly endorse Bitcoin shortly thereafter.
Tesla’s filing became public less than a week after MicroStrategy held its “Bitcoin For Corporations” conference. Many institutions have followed the software intelligence company and its CEO Michael Saylor in diverting their treasury assets into bitcoin, with MicroStrategy buying 0.1 percent of the total bitcoin supply last summer. The conference was an effort to demonstrate the playbook for how and why holding bitcoin on a corporate balance sheet makes sense.