Tesla has announced that it has bought $ 1.5 billion in bitcoin and will begin accepting cryptocurrency as payment, according to an SEC filing filed Monday.
The company said it acquired bitcoin for “more flexibility to diversify and maximize cash returns.” The news makes Tesla the first automaker to accept cryptocurrency.
Carson Block, the founder of Muddy Waters Research, doubts any federal interference in CEO Elon Musk’s plans.
“The SEC simply doesn’t have a record of success against Elon Musk, so I expect it to go to any effort in that direction, it would just be a dead end.”
Dan Ives, general manager of equity research at Wedbush, sees the action upside down.
“This is Tesla and Musk sinking into the deep end of the crypto pool and it’s something that’s been rumored for some time, and finally, now this puts the substance behind their sight. I think it’s something that the street will have a different vision of. but in the end … this will definitely be seen as a positive thing for the stock. “
Mike Novogratz, the founder of Galaxy Digital, sees this as a pioneering move that other companies will adopt.
“Every company should look at how to accept digital currencies, digital payments as part of their business scheme. It’s not that difficult. It’s what customers want, it’s the place where people move. And so I think it’s getting ahead of the curve, and I think you’ll see that every company is looking to figure out how you could tell them from McDonald’s to Bojangles. “
Mohamed El-Erian, chief economic adviser at Allianz, said this should give bitcoin a boost.
“What did Tesla tell you? Two things. One is that this will be a form of payment. And two is that this is an investment vehicle. So these are two strong supports for the notion, I want to emphasize the notion, that bitcoins are a currency, a penny, because after all money is a deposit of value. Money is a form of payment. So yes, that will increase the momentum. In terms of reaction, it will be everywhere. Some will see it as visionary. others will say “wait a minute, if I want to invest in bitcoin, I will do it directly, I don’t need Tesla to do it for me.” … So you will see a whole range of reactions, but for bitcoin holders , [Monday’s] Good news.”
Disclaimer