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FINTECH

Tesla’s bitcoin embrace drives future earnings volatility

Crypto enthusiasts have hailed the electric car company’s announcement it will accept payment in bitcoin as a ringing endorsement – but not everyone is convinced.

Elon Musk Speaks At Satellite Conference In Washington, DC
Crypto influencer. Elon Musk's Tesla Inc has announced it is buying bitcoin to manage surplus cash
Getty Images

On Monday, Tesla revealed that it had invested $1.5 billion in bitcoin as part of its efforts to diversify and maximize returns on surplus cash.

Just to give a little kicker to its own investment, the company also said that it expects to begin accepting bitcoin as payment for its cars in the near future, subject to applicable laws.

Chief executive Elon Musk has become a crypto influencer, discussing bitcoin with other CEOs on Twitter, declaring himself a supporter of it on the Clubhouse chat app and recently endorsing Dogecoin as “the people’s crypto”.

Its price doubled the day after Musk tweeted the single word “Doge”.

The 10-K filing with the US Securities and Exchange Commission made no mention of any personal account dealing in bitcoin by Tesla staff. Rather, it emphasized that this new policy has been approved by the board’s audit committee.

The price of bitcoin shot up from $39,000 to $46,000 on the news.