Electric car leader Tesla pointed out in its annual financial report submitted to the US Securities and Exchange Commission (SEC) this week that the company has invested approximately $1.5 billion in Bitcoin. Plus, consumers will be able to pay via this cryptocurrency to purchase the company’s products. On the day of the news, the price of Bitcoin rose sharply from US$38,903, an increase of more than 19%.
Tesla stated that the company updated its investment strategy in January this year. Based on the concept of diversification and flexibility, part of the cash is used to invest in other reserve assets. They include digital assets, gold, funds or others. So far, the company has bought a total of about $1.5 billion worth of Bitcoin.
Gizchina News of the week
Many listed companies in the United States have invested in Bitcoin. For example, MicroStrategy, which mainly develops business intelligence software and mobile programs, has purchased $425 million in Bitcoin assets last year to avoid inflation. Square, an electronic payment company, also announced last year the purchase of 4,709 Bitcoins at a price of $50 million. They did this based on the prediction that cryptocurrencies could strengthen their economic capabilities.
Is Bitcoin Reliable?
However, Tesla also warned that the value of digital assets may continue to be highly volatile, which brings risks and uncertainties. In addition, it is an emerging trend and it is impossible to predict the acceptance of investors, consumers or companies. The lack of physical form, and the reliance on various establishment and transaction verification technologies, or the decentralized nature, may be maliciously attacked or face technical obsolescence problems. This may cause financial damage to the company.
Tesla founder and CEO Elon Musk has never hesitated to publicly support cryptocurrencies. He added the hashtag #bitcoin to his Twitter profile at the end of January. It caused Bitcoin to rise by 15.5%. A Dogecoin, established in 2013, was also fueled by Musk. It rose from about $0.003 in November last year to $0.82 this week, an increase of 2723%.