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Tesla buys $1.5B in Bitcoin, will accept as payment soon

Tesla buys $1.5B in Bitcoin, will accept as payment soon

SILVER SPRING, Md. >> Tesla has invested around $1.5 billion in Bitcoin and said it plans to begin accepting the digital currency as payment for its high-end vehicles soon. The price of Bitcoin soared 15% to above $43,000 this morning.

The California-based electric car maker headed by Elon Musk revealed the new strategy in a filing with the U.S. Securities and Exchange Commission, saying its investment in digital currency and other “alternative reserve assets” may grow.

Bitcoin rose to $43,863 and briefly hit a new all-time high. Shares of Tesla moved higher as well.

In its fourth-quarter earnings report last month Tesla said it had cash and cash equivalents of $19.4 billion.

Dan Ives of Wedbush Securities said the move gives Tesla “more flexibility to further diversify and maximize returns on its cash.”

Palo Alto-based Tesla reported its first annual net profit in 2020, and its stock soared to make it the world’s most valuable automaker. Tesla joined the S&P 500 late last year and is currently valued at more than $820 billion.

It’s been a wild ride for Bitcoin since it made its Wall Street debut in December 2017. Major futures exchanges rolled out bitcoin futures, pushing it to roughly $19,300, a then-unheard-of price for the currency. It evaporated quickly in 2018, and by December of that year Bitcoin was worth less than $4,000 a coin.

More recently bitcoin rallied from below $11,000 in October and crossed $40,000 for the first time in its history.

While in the last two years companies have embraced the technology that underlies digital currencies like Bitcoin, a concept known as the blockchain, the actual uses for Bitcoin have not really changed since its rally three years ago. It’s still largely used by those distrustful of the banking system, criminals seeking to launder money, and for the most part, as a store of value.

But the dominoes could be falling if major companies follow Tesla’s lead and begin accepting the digital currency as payment.

Ives said “this move could put more momentum into shares of Tesla as more investors start to value the company’s bitcoin/crypto exposure as part of the overall valuation.

Telsa shares rose 2% to $869 in morning trading.

Critics say Tesla’s sales and profits are puny compared with established automakers such as Toyota and General Motors, and its huge valuation is not justified by financial fundamentals.

Source: www.staradvertiser.com

Author: By Associated Press


Tesla buys $1.5B in Bitcoin, will accept as payment soon

Tesla buys $1.5B in Bitcoin, will accept as payment soon

SILVER SPRING, Md. (AP) — Holders of Bitcoin may be able to cash in some of their investment in the digital currency for a brand new electric car.

Electric automaker Tesla said Monday that it has invested around $1.5 billion in Bitcoin and it plans to begin accepting the digital currency as payment for its high-end vehicles soon. The price of Bitcoin soared 15.4% to around $44,500 Monday in reaction to Tesla’s announcement, according to CoinBase.

The California-based electric car maker headed by Elon Musk revealed the new strategy in a filing with the U.S. Securities and Exchange Commission, saying its investment in digital currency and other “alternative reserve assets” may grow.

Bitcoin has drawn enthusiasts for its scarcity and security, but the volatile digital currency still is not widely used to pay for goods and services. It’s mostly been a store of value, like gold, with some limited merchants like Overstock accepting bitcoin for payment. It’s also used by those distrustful of the banking system or criminals seeking to launder money.

Whether other major companies will follow Tesla’s lead in investing in Bitcoin or accepting it for transactions is unclear. A vehicle is a large purchase, which could make Bitcoin a better fit to pay for it, but the wild price swings in Bitcoin could be a significant risk to any merchant who decided to accept it.

“It was wise of Tesla to announce that it will deem its investment in Bitcoin as an “alternative asset.” That is certainly appropriate, because Bitcoin might be coming into greater acceptance as currency, but it is not cash,” said Anthony Michael Sabino, a professor of law, at St. John’s University.

Tesla said last month that it had cash and cash equivalents of $19.4 billion after selling new shares to take advantage of a rising stock price. Dan Ives of Wedbush Securities said the move gives Tesla “more flexibility to further diversify and maximize returns on its cash.”

Tesla is in a unique position to accept digital currencies for payment, since the automaker does not rely on a network of independently owned dealerships to sell its vehicles unlike traditional car companies such as General Motors and Ford.

“It certainly seems that beyond embracing it as a store of value for his own trust or his own assets, it does appear that (Musk is) embracing it as a transactional tool as well,” said Michael Venuto, co-portfolio manager of the Amplify Transformational Data Sharing fund, an exchange-traded fund that tries to invest in digital currency technologies.

Venuto’s fund holds a small amount of Bitcoin but mostly invests in companies that build around such technologies.

Even with Tesla’s support, it could take some time before those who’ve made money investing in Bitcoin to use it to buy a car.

Jessica Caldwell, executive director of insights at Edmunds.com, doesn’t expect it to become commonplace because most people take loans to buy their vehicles or lease them and don’t pay in cash, said Plus, most people at present would not be comfortable taking a risk with cryptocurrency on such an expensive purchase, she said.

Other experts say it’s just a matter of time before Bitcoin finds more widespread use in transactions.

“I think the trend is inexorable,” said Richard Lyons, a finance professor at the University of California at Berkeley, predicting Bitcoin and other digital currencies “will become transactional currencies increasingly over the next five years. It’s not going to happen overnight.”

Whether Tesla will get a definitive competitive advantage in accepting Bitcoin remains to be seen. The automaker could be simply investing in Bitcoin because Musk has been known to have eclectic tastes. Musk launched a Tesla car into space to demonstrate the payload capabilities of his SpaceX company rockets.

Similar to Tesla, Virginia-based MicroStrategy Inc. announced in August that it would use some of the excess cash on its balance sheet to invest in alternative assets such as Bitcoin. The move has paid off so far. As of Feb. 2, the business analytics company said it held 71,079 Bitcoins that it purchased for an aggregate price of $1.15 billion since last summer. Using a value of $44,500, those bitcoins are worth $3.16 billion.

MicroStrategy shares have risen 660% since the August announcement, but the shares are susceptible to swings in the price of Bitcoin. They closed up 29% Monday at $1,041.

Palo Alto-based Tesla reported its first annual net profit in 2020, and its stock soared to make it the world’s most valuable automaker. Tesla joined the S&P 500 late last year and at a value of $824 billion makes up about 2% of the benchmark index. So, funds that track the S&P 500 now have some exposure to Bitcoin, however small that may be.

___

AP Business Writers Tom Krisher in Detroit and Ken Sweet in Charlotte, North Carolina, and AP journalist Terry Chea in California contributed to this report.

Source: news.yahoo.com


Bitcoin hits record highs as Tesla jumps in, but it's also great news for gold price

Bitcoin hits record highs as Tesla jumps in, but it’s also great news for gold price

(Kitco News) It’s a happy Monday for crypto investors as bitcoin surged to new record highs above $44,000 on the news that Tesla not only invested $1.5 billion in bitcoin but also said it would begin accepting the cryptocurrency as a form of payment.

“We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” Tesla said in the securities filing.

Tesla said that its $1.5-billion investment would provide “more flexibility to further diversify and maximize returns on our cash,” according to the company’s filing on Monday.

But the Tesla announcement is great news for gold investors as well. The electric-car maker said that it updated its investment policy to allow not only investment in digital assets, but also in gold bullion and gold exchange-traded funds (ETFs).

The new policy now includes investment in “alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds, and other assets,” the filing revealed.

Both bitcoin and gold saw a jump higher after the news broke Monday morning.

Bitcoin hit a new record high above $44,700, last trading up 12.27% on the day at $43,604, according to Kitco’s aggregated charts. Meanwhile, April Comex gold futures were also up 1.20% and last trading at $1,834.80.

Tesla’s investment into bitcoin could push bitcoin’s prices to $50,000 and be the catalyst behind bitcoin’s market cap expanding to $1 trillion, said Bloomberg Intelligence senior commodity strategist Mike McGlone.

What cryptocurrency will become the main one in a year?
BitcoinEthereum

“Tesla’s disclosure that it’s investing in Bitcoin and accepting the cryptocurrency for payment is a stepping stone similar to onboarding by PayPal in October, which points to about $50,000 as the next resistance target, in our view. The fear of missing out may be a driver as the benchmark crypto gains global appeal as a reserve asset, similar to gold,” McGlone said on Monday.

On top of that, there is the declining bitcoin supply, added McGlone. “By 2025, the annual rate of Bitcoin supply vs. total coins outstanding should fall below 1%,” he said.

A week ago, Tesla CEO Elon Musk said in an invitation-only audio-chat app Clubhouse that he is a bit “late to the party” when it comes to bitcoin. “I should have bought [bitcoin] eight years ago … I do at this point think bitcoin is a good thing. I am a supporter,” he said.

In the meantime, Musk has been busy on Twitter, posting about crypto-related topics, including Dogecoin, which has surged 65% in 24 hours and hit a record high of $0.083745 on Sunday.

Snoop Dogg and Gene Simmons were also busy tweeting about Dogecoin.

Dogecoin was created in 2013 and is based on the popular “doge” meme at the time that portrays a shiba inu dog. The cryptocurrency was started as a joke but has gained popularity this year after receiving attention from a Reddit group called SatoshiStreetBets.

So … it’s finally come to this … pic.twitter.com/Gf0Rg2QOaF

?? Who let the Doge out ??

Super Bowl views expected at record lows as everyone plans to watch Dogecoin price movements insteadhttps://t.co/lbuzo04dZ5

Source: www.kitco.com

Author: http://www.facebook.com/kitconews


GameStop's Plunge Could Spill Over Into Bitcoin

GameStop’s Plunge Could Spill Over Into Bitcoin

The recent surge in all Reddit’s r/WallStreetBets has shown off the tremendous power of younger digital-native investors. It’s been incredible watching how these online traders have managed to make a huge wave in retail stocks such as Gamestop (NYSE:GME). However, consider that this isn’t the trading community’s first big win. That, in fact, was Bitcoin (CCC:BTC-USD).

While people of all ages have invested in Bitcoin, youth have been the first adopters. A fall 2020 poll found that 55% of 18-34 year-olds were “likely” or “very likely” to buy Bitcoin over the next five years, compared to 46% of 35-44 year-olds, 36% of 45-54 year-olds, 19% of 55-64 year-olds, and just 8% of retirees. Cryptocurrency may become a trend that spans all generations, but for now, it’s still primarily in the domain of younger traders.

That makes the recent r/WallStreetBets phenomenon even more fascinating. The savvy traders that powered up the rise of Bitcoin, Ethereum (CCC:ETH-USD), and so on in recent years are now making moves on stocks on the New York Stock Exchange and even the precious metal silver.

For the past week or so, it appeared that the Reddit traders were winning in their fight against traditional Wall Street institutions. However, the tables have turned recently. GameStop stock crashed back below $100 and continues moving lower. Many other so-called meme stocks are plunging with it.

  • 7 Growth Stocks That Won’t Be Stopped in 2021
  • A glance around the r/WallStreetBets forum now will find a much less jubilant tone.

    That rise in concern may spread to the Bitcoin market as well. The cryptocurrency has been on a nearly straight-up run for many months now, surging from $10,000 to more than $40,000 at one point. That’s simply a tremendous move. And it gave the winning traders confidence to pursue more aggressive trades in other markets, such as in shares of GameStop and AMC Entertainment (NYSE:AMC).

    With losses starting to pile up in those names, however, young traders’ overall risk appetite may start to decline. That’s doubly true considering that, reportedly, the Securities and Exchange Commission (SEC) is investigating the recent trading in various stocks championed in r/WallStreetBets.

    As if that weren’t enough, a major logistical piece of the cryptocurrency trading environment, the Tether coin, is under fire. An article posted a few weeks ago took the internet by storm. The anonymous author raised startling concerns about the safety and security of Tether, a so-called “stable coin” used in place of dollars on crypto exchanges that lack access to U.S. dollar banking.

    The author pointed out numerous shortcomings in the story around Tether, such as a supposed lack of bank deposits to support Tether’s value. This is of vital concern, as Tether is the primary day-to-day vehicle that drives a massive chunk of Bitcoin trading. If Tether should stop functioning normally, it could cause a flash crash for the price of Bitcoin.

    Making matters even more spicy, the Department of Justice is currently investigating Tether, and new information from their inquiry could surface at any time.

    There’s a compelling long-term investment case for Bitcoin. I won’t argue that. However, as a trade, this is a dangerous moment for the crypto space. Many of crypto’s most passionate investors just experienced gut-wrenching volatility from trading the Reddit stocks.

    On top of that, the excitement in GameStop has attracted heavy government scrutiny. When investigators go looking through trading communities, they may find unflattering information about crypto dealings as well. On top of that, you’ve got an active Department of Justice investigation into a main funding vehicle for the crypto trading space, Tether.

    Add it all up and there are a bunch of things that could go wrong for Bitcoin in the short term. However, the price of Bitcoin hasn’t reacted yet. In fact, Bitcoin is still fairly near its all-time high. As such, this could be a good time to lock in some gains. As we’ve seen with GameStop and AMC, once the meme magic ends, these sorts of trades can absolutely plummet within the space of a few days.

    On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article.

    Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

    Source: investorplace.com

    Author: By

    Ian Bezek, InvestorPlace Contributor


    Tesla Has $1.5 Billion Worth of Bitcoin on Its Balance Sheet, Plans to Accept BTC for Products – Bitcoin News

    Tesla Has $1.5 Billion Worth of Bitcoin on Its Balance Sheet, Plans to Accept BTC for Products – Bitcoin News

    Tesla Has $1.5 Billion Worth of Bitcoin on Its Balance Sheet, Plans to Accept BTC for Products

    The publicly listed firm Tesla has announced in a Securities and Exchange Commission (SEC) Form 10-k filing that the company has purchased $1.5 billion worth of bitcoin. When the news broke, the price of the leading crypto asset jumped well over 15%, touching a new all-time price high at $44,899 per coin.

    Tesla, the American electric vehicle and clean energy company based in Palo Alto, California has revealed the company has invested in bitcoin (BTC). This is following the great number of dogecoin (DOGE) tweets stemming from the Tesla founder Elon Musk during the last two weeks.

    The announcement was found in a SEC Form 10-k filing which says the firm may “hold and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.”

    “In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity,” the Tesla 10-k SEC filing continues.

    “As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term,” the SEC filing notes.

    Additionally, Tesla detailed in the filing that the company will begin to accept bitcoin (BTC) as a form of payment for Tesla products.

    “Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt,” Tesla’s filing details.

    Of course, the crypto community was extremely pleased to hear that Tesla was now a bitcoin holder and keeps BTC on its balance sheet. The price of bitcoin (BTC) literally went up in value roughly $4,000 since the Tesla news started going viral.

    Significantly large BTC short positions were immediately liquidated at $42,700 per unit. After the Digital Currency Group founder, Barry Silbert, tweeted about the competition between Microstrategy and Grayscale, and Silbert welcomed Elon Musk into the race.

    “Player 3 has entered the race. Good luck, Elon Musk,” Silbert tweeted. At the time of publication, bitcoin (BTC) is exchanging hands for prices between $43k and $44k.

    What do you think about Tesla adding $1.5 billion to its balance sheet? Let us know what you think about this subject in the comments section below.

    $1.5 billion BTC, All time high, All-time price high, ATH, Barry Silbert, Bitcoin Tesla, companies, corporations, crypto assets, dogecoin, Elon Musk, grayscale, microstrategy, Tesla, tesla bitcoin, Tesla to accept BTC, Teslas Bitcoin

    Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

    Source: news.bitcoin.com

    Author: News

    by
    Jamie Redman


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