Elon Musk is serious about cryptocurrency.
On Monday, Musk moved from jokey tweets to major investments when Tesla disclosed in an SEC filing that the company invested $1.5 billion in bitcoin in January, and aims “to begin accepting bitcoin as a form of payment for our products in the near future.”
This amounts to 10% of Tesla's cash reserves, and is the largest corporate purchase of bitcoin ever.
Bitcoin (BTC) spiked 14% on the news to a new all-time-high above $44,000, and Tesla (TSLA) shares jumped 2%.
[READ MORE: How bitcoin narratives have evolved to fuel current price surge]
The $1.5 billion bitcoin buy puts Tesla in the company of two other consumer-facing tech companies that have loaded up on bitcoin in the past year: Square (which bought $50 million worth in October, amounting to 1% of its cash reserves) and cloud services provider MicroStrategy, which has kept buying more bitcoin in the last few months and now holds 71,079 bitcoin, worth more than $3 billion as of Monday morning.
Planning to accept bitcoin as payment puts Tesla in league with PayPal, which began allowing its customers to buy and sell bitcoin, ether (ETH), litecoin (LTC), and bitcoin cash (BCH) in its PayPal wallet in December, and will add the function to Venmo this year, along with the ability to make purchases with crypto.
On PayPal’s Q4 earnings call last week, CEO Dan Schulman said crypto trading volume has “exceeded expectations” and that the company’s crypto efforts so far are “just the beginning of an extensive roadmap” around crypto.
Tesla accepting bitcoin as payment in the future is “a potential game changing move for the use of bitcoin from a transactional perspective,” Wedbush analyst Dan Ives wrote in a note on Monday, adding that the news “formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto.”
Musk has tweeted about cryptocurrencies a number of times over the past year, but Tesla’s latest move takes his support from mere social media flag-waving to serious investment by the $820 billion publicly traded company he helms.
In May 2020, Musk replied to a J.K. Rowling tweet about bitcoin, telling the “Harry Potter” author, “massive currency issuance by govt central banks is making Bitcoin Internet money look solid by comparison.” On the other hand, in December 2020 he tweeted that bitcoin “is almost as bs as fiat money.”
More recently, Musk has turned his Twitter feed, which has repeatedly had the power to move markets, to the meme-based cryptocurrency dogecoin (DOGE).
[READ MORE: What is dogecoin?]
In April 2019, Musk had declared, “Dogecoin might be my fav cryptocurrency. It’s pretty cool.” In the past few weeks, amid the Reddit-fueled market mania with stocks like GameStop and AMC, Musk has returned to pumping dogecoin, blasting out remarks like “Dogecoin is the people’s crypto” and Lion King memes featuring his face and the face of the Shiba Inu doge meme.
His tweets prompted a wave of social media buzz that made dogecoin the most tweeted-about cryptocurrency in a single day on Jan. 28, beating a bitcoin single-day record from Jan. 2. Dogecoin surged so dramatically at one point that investment app Robinhood turned off its Instant Buying feature for just bitcoin and dogecoin.
In a live chat on the audio app Clubhouse on Jan. 31, Musk cautioned, “Occasionally I make jokes about dogecoin, but they are really meant to be jokes.”
But Tesla buying $1.5 billion of bitcoin is no joke. And among the recent spate of non-crypto tech companies showing serious buy-in for crypto, Tesla is the biggest name yet.
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Daniel Roberts is an editor-at-large at Yahoo Finance and has covered bitcoin since 2011. Follow him on Twitter at @readDanwrite.
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