The announcement of Tesla’s investment, buried in Tesla’s 2020 annual report, follows months of tweets by Musk related to cryptocurrencies including Bitcoin, sometimes helping fuel its rally.
The cryptocurrency jumped 10% on Monday following Tesla’s disclosure.
(Graphic: Musk's Bitcoin tweets: )
In a December exchange on Twitter, Musk asked MicroStrategy CEO Michael Saylor, who recommended Tesla buy Bitcoin, about the possibility of “large transactions” to convert some of Tesla’s balance shit to the cryptocurrency.
Saylor is a Bitcoin bull and his software company has bought around 41,000 bitcoins, currently worth close to $1.7 billion. MicroStrategy’s stock jumped 18% on Monday, bringing its gain in 2021 to 146% as traders view it as a play on Bitcoin.
Replying in May to a tweet by author J.K. Rowling about Bitcoin, Musk wrote that massive debt taken on by central banks made Bitcoin more attractive. He added that he owned only a quarter of a bitcoin, which was trading below $10,000 at the time.
Last month, Musk added “#Bitcoin” to his Twitter profile, sparking a 14% surge in the digital currency, and in December he tweeted, “Bitcoin is my safe word.”
Driven in part by interest from institutional investors, the price of Bitcoin has quadrupled since in the past four months, surging far beyond record highs set in 2017. Some investors view it a hedge against inflation.
Tesla also said in its filing it would soon accept Bitcoin as a form of payment.
In chat on social media app Clubhouse that drew thousands of listeners earlier this month, Musk said Bitcoin was “on the verge” of being more widely accepted among investors. Reporting by Noel Randewich; editing by Megan Davies and Nick Zieminski