Elon Musk's Tesla makes $1.5bn bitcoin bet

The news sent the highly volatile digital crypto currency to an all time high, as speculators and enthusiasts took the news as an endorsement of the asset’s viability.

Tesla confirmed its investment in a filing to the US Securities and Exchange Commission (SEC).

"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. As part of the policy, which was duly approved by the Audit Committee of our Board of

Directors, 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.

“Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, 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, which we may or may not liquidate upon receipt.”

The filing notes that the prices of digital assets have been highly volatile, including as a result of various associated risks and that any declines in valuation will have to be recognised as impairment charges by the company.

In the filing Tesla investors are also warned that digital assets can be lost as a result of security breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets.

Regardless of the warnings Tesla’s endorsement of Bitcoin is likely to in the immediate term to incite a wave of copy cats including from armies of social media connected small investors.

It comes just days after Elon Musk tweeting about Dogecoin, a parody crypto currency and after his intervention in January in the frenzied stock market betting on US retailer Gamestop shares.

On January 26th Elon Musk tweeted “GameStonk!!” a motto popular with users of the Reddit social media platform’s WallStreetBets forum, who had piled cash into GameStop and the shares hit an all time high a day later.