Tesla Invests $1.5 Billion in Bitcoin, Plans to Accept the Cryptocurrency as Payment in the Near Future
【Summary】Electric vehicle maker Tesla invested $1.5 billion in bitcoin, the cryptocurrency that allows for secure, peer-to-peer instant payments. The company's plan to accept bitcoin as a form of payment is unprecedented in the auto industry. Tesla is expected to start accepting the digital currency in the near future.
How much will a Tesla Model 3 cost in bitcoin? That's the question potential buyers might consider in the future when purchasing an electric vehicle from the California electric car company.
On Monday, Tesla invested $1.5 billion in bitcoin, the cryptocurrency that allows for secure, decentralized peer-to-peer instant payments. Tesla is expected to start accepting digital payments in the near future.
The company, which has become the world's most valuable automaker, has already pioneered new technology in the auto industry, including autonomous driving technology and building fully-electric vehicles that support over-the-air (OTA) software updates. But Tesla's plan to accept bitcoin as a form of payment for one of its electric vehicles or other products is unprecedented in the auto industry.
While there are many forms of cryptocurrency, Bitcoin is by far the world's most popular.
Tesla's investment in bitcoin resulted in its stock price jumping roughly 10% on Monday, reaching a new record high above $44,000. Tesla's shares are up around 2% to $865.03.
In a securities filing on Monday, Tesla said it made the investment in Bitcoin after updating its company investment policy last month to allow the purchase of digital assets. Tesla also said its revised policies also permit it to invest in gold bullion and gold exchange-traded funds (ETFs).
"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," Tesla said in its filing. However, Tesla warned investors of the volatility of bitcoin's price.
What is Bitcoin?
Bitcoin and other cryptocurrencies are a form of "digital currency" that emerged in 2008. But the funds are transferred without the use of banks, therefore are not subject to fees or other charges financial institutions collect from the movement of money from one party to another. Bitcoins can be traded for goods or services with companies that accept the digital currency as payment.
Each transaction of Bitcoin from one party to another is stored in a distributed ledger called a blockchain that keeps track of all transactions. This distributed and shared ledger offers the highest level of security and eliminates any chance of a data breach. The field of cryptography is the foundation of Bitcoin's enhanced security.
Each time a transaction occurs, the ledger is updated and shared among users, so the transfer of bitcoin ownership is entirely traceable. Anyone with a computer can set up a Bitcoin address to anonymously receive or transfer bitcoins.
Tesla Chief Executive Elon Musk has frequently tweeted his support for Bitcoin in recent months. In December, he posted an image on Twitter that suggested his attraction to the often controversial cryptocurrency.
According to Bloomberg, Musk also inquired about converting "large transactions" of Tesla's balance sheet into Bitcoin in a recent Twitter exchange with Michael Saylor, chief executive officer of MicroStrategy Inc. Saylor is a prominent and outspoken supporter of the digital currency.
In a series of recent tweets, Saylor encouraged Musk to shift dollars from the electric-car maker to Bitcoin in order to "do your shareholders a $100 billion favor."
Tesla's massive investment in Bitcoin also represents a significant percentage of its cash reserves. The automaker had more than $19 billion in cash and cash equivalents on hand at the end of 2020. The company's market cap is over $820 billion.
Over the past decade, Tesla has been a disruptor of auto industry norms, beginning with its minimalistic, yet high tech battery-powered vehicles that can drive up to 400 miles per charge. The company's investment in bitcoin further cements its position as an auto industry disruptor.
Although Tesla is the first major automaker to build only electric vehicles, it's not the first major company with plans to accept cryptocurrency as a form of payment.
Microsoft was one of the first companies to accept Bitcoin back in 2014. The software company allows customers in the U.S. to use the digital currency to purchase digital content, including apps and games for its Windows products and its Xbox video game platform.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
Commercial Vehicle Startup Electric Last Mile Solutions Inc. Announces Battery Supply Agreement with China’s CATL
Honda Unveils its New ‘SENSING 360’ Omnidirectional Safety & Advanced Driver Assist System
Aviation Startup Lilium and ABB Announce Plans to Build a MegaWatt eVTOL Charging Network
Lucid Reveals New Details of its ‘DreamDrive’ Advanced Driver Assist System, its Answer to Tesla’s Autopilot
Tesla Sold 56,000 China-made Vehicles in September, the Highest Since its Shanghai Factory Began Producing Cars in 2019
Tesla Challenger XPeng Celebrates the Production of its 100,000th Electric Vehicle
Tesla’s Full Self Driving Beta Rolling Out to More ‘Good Drivers’
EXCLUSIVE: ICONIQ Motors & Supercar Manufacturer W Motors Plan to Reinvent the Passenger Experience with the Sleek, Luxurious and Fully-Electric Seven ‘Smart Passenger Vehicle’
- Tesla Challenger XPeng Reports Record July Deliveries, its 2nd Consecutive Month of Record-Setting Growth
- The Biden Administration Asks Automakers to Back its Pledge of 40% of New Car Sales Being Electric by 2030
- The Volta Zero Electric Truck Will Be Powered by a ‘Connected Vehicle Software Platform’ Developed by Silicon Valley Startup Sibros
- The New Mercedes-Benz AMG GT63 S E Plug-in Hybrid is the Most Powerful AMG Model Ever Made
- Gatik Raises $85 Million in Latest Funding to Scale its Fleet of Autonomous Box Trucks for Middle-Mile Delivery
- The First Pre-Production Low Earth Orbit Satellite to Support Automaker Geely's Future Self-Driving Vehicles Rolls Off the Assembly Line
- 2022 Mazda MX-30 EV Unveiled With 100 Miles of Range
- Xilinx & Motovis Partner on a Hardware and Software Solution for Autonomous Vehicle Cameras Powered by a Neural Network
- Lucid Motors Debuts on the Nasdaq and Raises $4.4 Billion as its Looks to Take on Tesla
- Electrify America Adds Smartphone Compatibility To Help EV Owners Find Chargers