Tesla buys $1.5 billion in bitcoin: as Elon Musk jumps on board with cryptocurrency
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Bitcoin is a digital currency that is not guaranteed by a bank or government. Investors can “mine” them by devoting computing power to authenticating other bitcoin transactions, or they can be bought and sold on exchanges using real money.
Tesla also said in its public filing that it would soon begin accepting bitcoin as a form of payment for its products.
The company warned investors that the value of its digital assets could fluctuate wildly.
“The prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable,” Tesla said. “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.”
Musk himself appears to have recognized the risk of holding cryptocurrencies in the past. On Dec. 20, he tweeted, “Bitcoin is almost as bs as fiat money.”
Lately, he has been promoting bitcoin alternative Dogecoin on Twitter.
“While many on the Street have discussed the prospects of this move for Tesla, this morning’s news formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto,” Wedbush Securities analyst Dan Ives said in a research note.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.