Tesla has announced it has bought $ 1.5 billion in bitcoins and would begin accepting the cryptocurrency as payment, according to a SEC statement Monday.
The company said it bought bitcoin to get “more flexibility to diversify and maximize our cash returns.” The news makes Tesla the first carmaker to accept cryptocurrency.
Carson Block, founder of Muddy Waters Research, doubts any federal interference in CEO Elon Musk’s plans.
“The SEC has no records of success against Elon Musk, so I hope there is some effort in that direction. It would basically be a dead end.”
Dan Ives, Wedbush’s director general of equity research, sees stocks rise.
“It’s Tesla and Musk diving into the deep end of the pool with cryptography and it’s something that’s been rumored for a while and ultimately now it’s really what puts substance behind their vision. .I think it’s something that the street will have a different view of, but ultimately … it will definitely be seen as a positive point for action. “
Mike Novogratz, founder of Galaxy Digital, sees it as a pioneering step that other companies will take.
“All companies 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 where the world moves. And so I think which is ahead of the curve, and I think you’ll see all the companies looking to figure out how they could, from McDonald’s to Bojangles, to say the least. ”
Mohamed El-Erian, chief economic adviser to 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 the second is that it’s an investment vehicle. So these are two powerful supports for the notion, I want emphasize the notion, that bitcoins are a currency, a money, because after all money is a reserve of value.Money is a form of payment.So yes, this will generate more momentum.About the reaction Some will see it as a visionary, others will say, “Wait a minute, if I want to invest in bitcoin, I’ll do it directly, I don’t need Tesla to do it for me.” … So you’ll see a whole range of reactions, but for bitcoin holders, [Monday’s] good news.”
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