According to information from a recent U.S. Securities and Exchange Commission (SEC) 10-K form, the electric car maker recently invested $1.5 billion in the world’s leading digital asset. “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,” reads the filing. “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.”
To that end, the filing indicates Tesla invested an aggregate of $1.5 billion into Bitcoin, and they also expect to begin allowing customers to render payments with the digital asset. The latter, though, will be “subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt,” reads the filing.
As of press time, Bitcoin was trading at more than $46,000 per unit.
The SEC filing form does, though, also acknowledge the inherent risks associated with dealing in digital currencies. These include volatility, the threat of cyberattack and even the potential for “technological obsolescence.”
“The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties,” reads the SEC disclosure form. “For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence.”
The move has set off a firestorm of feedback from pundits, technology experts, investors and others. Musk, who is no stranger to the spotlight, has also made waves, too, via his personal social media account.
Recently, Musk also tweeted about another trending digital asset: dogecoin. To that end, he has teased interest in the alternative investment vehicle, which is often considered, quite literally, a joke.
"Ð is for Ðogecoin! Instructional video."
Musk fired off a number of tweets about the coin, including pop culture references and even an online poll.
Other Public Companies with Exposure to Bitcoin
Yahoo! Finance points out that while Tesla made waves with its recent announcement, a number of other public companies also have notable Bitcoin and cryptocurrency exposure. Among those companies, as noted by Tom Lee, head of research for Fundstrat Global Advisors and FSInsight, are the following:
- Silvergate Capital
- Galaxy Holdings
According to information from Yahoo! Finance, Bitcoin has risen approximately 32% in 2021 alone and more than 272% over the last 12 months.