Elon Musk invests $1.5B Tesla budget into Bitcoin

Bitcoin reached an all-time high of $44,800 a day after Tesla, a top-performing electric vehicle company owned by Elon Musk, announced on Monday, February 8 that they invested $1.5 billion into the digital asset. This caused the digital asset’s price to surge by 14%.

In Tesla’s recent annual report filed to the US Securities and Exchange Commission, the company stated that they have updated their investment policy for more flexibility in diversifying and maximizing their profit returns.

This decision, according to Tesla, will allow the company to invest cash reserves in alternative reserve assets including cryptocurrency. The company also added that they may acquire and hold digital assets from time to time or for the long term.

Tesla to start accepting Bitcoin payments

In addition to investing $1.5 billion in the cryptocurrency, Tesla also announced that the company will start accepting Bitcoin payments in purchasing their products. The electric automobile company is the first major automaker to make the jump into accepting crypto payments.

The new crypto payment scheme, according to Tesla, will be initially launched on a limited basis. Investing $1.5 billion in Bitcoin will give the company adequate operating liquidity once it starts accepting the cryptocurrency as payment.

This move by Tesla will further drive Bitcoin’s mainstream adoption as a mode of payment and investment according to Stefan George, the co-founder and chief technology officer of prediction market platform Gnosis.

Dermot O’Riordan, a partner at blockchain venture capital Eden Block shares the same sentiments as George on Bitcoin’s move towards mainstream use.

‘This moment will likely be looked upon in years to come as a genuine tipping point; Elon and Tesla’s support legitimizes crypto and opens up bitcoin to a whole new class of retail and institutional investors,’ said O’Riordan.

Elon Musk, chief executive officer (CEO) of Tesla, has been a long-time supporter of Bitcoin and other cryptocurrencies. Over a week ago, he said that the cryptocurrency was on the verge of being more widely accepted by investors.

Moreover, Musk often turns to his Twitter account to show support for Bitcoin. Just this January, he changed his bio to #Bitcoin that caused a commotion among his fans and crypto investors.

This led to Bitcoin’s rally that briefly increased its price by 20%. Additionally, he made a statement at social media chat site Clubhouse that he fully supports Bitcoin and that the digital asset is a ‘good thing’.

Controversial tweets from the world-famous billionaire also caused meme currency Dogecoin to rise. In one of his recent tweets, he mentioned that the digital meme asset was his ‘fav cryptocurrency.’

This social media-fueled rally caught the attention of other celebrities such as R&B artist Snoop Dogg and Kiss bassist Gene Simmons. They also posted tweets on their personal Twitter account showing support for Dogecoin.

Currently, Dogecoin has a market cap of $10.38 billion according to the data provided by CoinDesk.