Bitcoin Price Hits Record After Tesla Buys


The electric-car maker Tesla is known for bucking convention. That apparently extends to using its own corporate cash to buy Bitcoin.

The company disclosed in its annual report on Monday that it had purchased $1.5 billion worth of the cryptocurrency, as part of an initiative begun last month to invest in alternative assets like digital currencies and gold bullion. It added that it expected to begin accepting Bitcoin as a form of payment “in the near future.”

Tesla said it held $19.4 billion in cash and equivalents as of Dec. 31.

Other companies, including the payments processor Square and the business intelligence software provider MicroStrategy, have publicly said they were investing corporate cash in Bitcoin. Tesla is perhaps the most prominent company to do so.

The carmaker’s chief executive, Elon Musk, is known for promoting cryptocurrencies on his widely followed Twitter feed. Most recently, he has cheered on Dogecoin, a digital token begun as a joke but whose price has soared after encouragement by Mr. Musk.

In December, Mr. Musk said on Twitter that Bitcoin was “almost as” shaky as conventional currency. He has previously criticized efforts by central banks to ease monetary policy to support the economy as “massive currency issuance.”

His Twitter pronouncements have caused trouble for Mr. Musk, who recently became the world’s richest man. In 2018, he and Tesla reached a settlement with the Securities and Exchange Commission after he said he had the “funding secured” to take Tesla private at $420 a share. The financing for the effort was not nearly as far along as Mr. Musk made it out to be, and the S.E.C. required him to step down as chairman of Tesla. He and the company were required to pay $20 million each in fines.

Under that deal and a revised agreement he and the S.E.C. reached in 2019, a Tesla lawyer has to approve any Twitter posts in which Mr. Musk discusses the company’s financial condition, earnings forecasts and other important information. The revised agreement came after the securities regulator sought to have Mr. Musk in contempt of court for violating the 2018 agreement with a post, which had not been reviewed by a lawyer, about the number of cars Tesla would produce and deliver in 2019.

Mr. Musk, who has more than 46 million followers on Twitter, has also used the social media platform to encourage the frenzy for the shares of GameStop, the troubled video game retailer. And last year, he criticized how elected officials and others were responding to the coronavirus pandemic and wrote last March that the number of confirmed virus cases would be “close to zero” by the end of April.

Bitcoin reached a record after Tesla’s announcement, rising more than 10 percent in Monday morning trading to above $44,000 per coin.


Sahred From Source link Business