Bitcoin's price rose and Tesla (TSLA) - Get Report shares advanced Monday after the electric-vehicle company said in a Securities and Exchange Commission filing that it had purchased $1.5 billion of the digital asset.
“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,” Tesla said in the filing.
“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,” the company added in the filing.
As for the big news, “Thereafter, we invested an aggregate $1.5 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, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”
Bitcoin recently traded at $42,889, up 12%. Tesla shares traded at $861.54, up 1.1%.
Just 10 days ago, bitcoin soared 19% after a one-word tweet from Tesla Chief Executive Elon Musk: “bitcoin.” That shows the frenzied market activity both for bitcoin and anything Tesla/Musk related.
Tesla has skyrocketed to become the seventh largest company in the world with a market capitalization of $808 billion.
Meantime, Bloomberg News takes note that Miami's mayor, Francis Suarez, wants to add bitcoin to the city's balance sheet.
Suarez has proposed that the city allow certain types of bitcoin transactions and invest in the cryptocurrency, the news service reported.