Tesla buys $1.5 billion in bitcoin, sending its price soaring
February 8, 2021
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Tesla buys $1.5 billion in bitcoin, sending its price soaring

Aurich Lawson / Liesa Johannssen-Koppitz/Bloomberg via Getty Images

The price of bitcoin rose to a new record above $43,000 on Monday after Tesla reported that it had purchased $1.5 billion of the world’s most valuable cryptocurrency. In a regulatory filing, Tesla also announced that it expected to “begin accepting bitcoin as a form of payment for our products in the near future.”

Tesla said that this would be “initially on a limited basis, which we may or may not liquidate upon receipt.”

Bitcoin is in the midst of its fourth major bull market, having risen 10-fold over the last two years. A growing number of mainstream organizations have chosen to add bitcoin to their investment portfolios, pushing up the currency’s value.

While Tesla placed a big bet on bitcoin, the most famous cryptocurrency, CEO Elon Musk has been tweeting about the most meme-able cryptocurrency, Dogecoin. On Friday evening, for example, he posted a Twitter poll asking whether the “future currency of Earth” would be “Dogecoin to the Moooonn” or “all other crypto combined.” Dogecoin won in a landslide.

A string of Musk tweets appears to have played a significant role in the 10-fold rise of Dogecoin’s value over the last two weeks. One Dogecoin is now worth more than eight cents, an all-time record.

On a recent appearance on the social audio app Clubhouse, Musk said he had become a recent fan of bitcoin. He expressed regret in not investing in the cryptocurrency earlier. He also warned people not to take his promotion of Dogecoin too seriously.

“Occasionally I make jokes about Dogecoin, but they are really meant to be jokes,” Musk said. “Dogecoin was made as a joke to make fun of crypto, but fate loves irony.”

In its Monday regulatory filing, Tesla warned that its bitcoin holdings could add noise to its reporting of quarterly profit. If bitcoin’s value were to plunge—as it does from time to time—Tesla could be forced to recognize an impairment charge.

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