It is official. Tesla is a Bitcoin bull.
On Monday, the electric carmaker announced that it had purchased around $1.5 billion worth of Bitcoin tokens in January. In its filing to the US Securities and Exchange Commission, the firm admitted that it changed its investment policies to use a portion of its cash reserves to buy alternative assets, including cryptocurrencies, gold bullion, and gold-focused exchange-traded funds.
“Thereafter,” the Tesla filing read, “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.”
The paper also detailed Tesla’s plans to use Bitcoin as a form of payment for its products in the near future. Nonetheless, it clarified that its decision on the matter would depend on “applicable laws and initially on a limited basis.”
Bitcoin Price Explodes to ATH
The BTC/USD exchange rate exploded as soon as the Tesla news broke into the wire. The pair surged to its new record high of $44,900 after rising by more than 13 percent in just four hours of trading, leading many analysts to predict an extended bull run towards $50,000 in the sessions ahead.
Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, stated that Bitcoin market cap could hit $1 trillion in the future based on Tesla’s announcement only, adding that the carmaker’s decision to buy cryptocurrencies as a reserve asset is “a stepping stone similar to onboarding by PayPal in October.”
“[It] points to about $50,000 as the next resistance,”Mr. McGlone said.
Michael Saylor, the CEO of MicroStrategy, a firm that holds more than 71,079 BTC, which costs $3.5 billion at the current exchange rates, earlier stated that Tesla’s cryptocurrency adoption would pave the way for other major firms to do the same.