Electric automaker Tesla announced on Monday that it had invested around $1.5 billion in Bitcoin and it plans to start accepting the digital currency as a way of payment for its vehicles soon. The price of the Cryptocurrency Bitcoin soared to $46,375 in reaction to that announcement, according to CoinBase data.
Bitcoin has drowned lots of interest lately; the digital currency is very volatile because it is a new technology and is used widely by those who do not trust the banking system. Still, it is not a popular way to pay for goods or services. Many investors and fund managers believe that the technology behind Bitcoin, which is called blockchain, will revolutionize the financial system.
This move from Tesla to accept payment for its vehicles is the second announcement from a major company after PayPal has announced at the begging of the year that it will be adding Bitcoin as a way of payment to its platform.
Other company and fund managers invested already in Bitcoin from a while, last year when the price was around $4000, they purchased Bitcoin, looks like this move has paid off so far.
Tesla is the first automaker company to accept digital currencies for payment, in 2020, its stock soared to make it the world’s most valuable automaker, with an $824 billion value. Late last year, it joined the S&P 500.
Whether Tesla will get a definitive competitive advantage in accepting Bitcoin remains to be seen. The automaker could be simply investing in Bitcoin to diversify their portfolio.