Tesla, Inc., the brainchild of entrepreneur Elon Musk, made a big splash Monday morning with a securities filing announcing that the company is investing $1.5 billion in Bitcoin and making plans to accept cryptocurrency in the "near future."
The news was another major boon for the flagship cryptocurrency, which has seen prices skyrocket over the last year, as global fears about the stability of government-issued currency have intensified during the COVID-19 pandemic. In response to the news, Bloomberg reported that Bitcoin jumped another 16% to an all-time high of $44,795.20.
Tesla's announcement lends additional legitimacy to cryptocurrency, which has recently shown significant signs of shaking legacy investor skepticism about its staying power. Other cryptocurrencies, including the farcical Dogecoin, have also risen in recent days and weeks as major businesses like Paypal and Square have announced that they will begin accepting Bitcoin as currency.
According to Tesla's filing, "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. 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."
Tesla stock also rose slightly as news of the filing percolated on the internet, and many analysts predict that investors may reward Tesla for its willingness to diversify its cash holdings with cryptocurrency.