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On Monday, Tesla announced its buying of Bitcoin, and it will soon start accepting Bitcoin as a payment method.
In a filing with SEC (Securities and Exchange Commission), Tesla announced that it has bought Bitcoin worth $1.5 billion to further add to flexibility and diversity to maximize the returns. It also announced that the company would soon accept Bitcoin as a payment method for its products. Tesla will be the first major automobile company to add a Bitcoin as a method of payment. Although it is not the first company to employ this, MicroStrategy, a service based company, has already adopted the policy of converting a portion of cash to Bitcoin. Tesla's filing said that the company might invest a certain of cash in reserve assets such as digital assets, gold exchange-traded funds, and gold bullion.
Elon musk was well seen to be a supporter of Cryptocurrencies and was driving up the prices of many currencies like Dogecoin and Bitcoin by his tweets. His tweets often encourage people/investors to buy digital assets. In the previous week, he tweeted that Bitcoin was on the verge of being accepted widely by the investors, and in January, he even changed his bio of the tweeter account to include #Bitcoin. His only this move pushed up the price of Bitcoin by nearly 20%.
Bitcoin has set new records recently and has got support from many financial institutions. After the disclosure of this news by Chief executive officer Elon Musk, Bitcoin has seen an increase of nearly 13.25% to set another record to $43,159 (at the time of writing).
Now, the question is, what does this move mean to Tesla? According to the sources, this move by Tesla will put momentum to its shares as the investors will start to value the company's Crypto exposure. Recently, the shares of Tesla are also increased by 2%.
It is expected that many companies will look to allocate Bitcoin after this move of Tesla.