Tesla has invested $1.5 billion in Bitcoin and plans to accept virtual currency as a means of payment for its cars, a trusted brand of cryptography also suspected of being used for illegal transactions.
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In the wake of this announcement, the price of cryptomony skyrocketed to a record $44,768.36 at 8:25 a.m.
So in theory, it only takes one bitcoin to buy Tesla’s Model Y car, a city 4X4 (SUV), which sells for a base price of $41,990 with no tax credit.
This initiative comes as no surprise, since Elon Musk, the boss of the electric vehicle manufacturer renowned for its iconoclastic positions, has long been praising cryptomoney.
At the end of January, he had temporarily changed his mini-description on Twitter to simply enter #bitcoin, which then temporarily boosted his share price by about 20%.
The world’s richest man, on paper, also regularly mentions the Dogecoin, an obscure virtual currency, on his account, each time causing his value to soar.
But the decision announced Monday in a document addressed to the gendarme of the American Stock Exchange, the SEC, is of another dimension since it was validated by the board of directors of Tesla, which is worth more than 800 billion dollars on Wall Street.
The group explains that it has recently changed its investment policy in order to diversify its sources of liquidity. In this context, the board of directors has authorised the company to invest in various financial assets, including bitcoin.
Tesla also plans to « start accepting Bitcoin as a means of payment when purchasing its products in the near future ».
Bitcoin still has a sulphurous reputation.
While some speculators do not hesitate to bet on its fluctuations on the markets and various online platforms, no major central bank recognizes Bitcoin as a currency in its own right.
Created by anonymous individuals and managed by a decentralized network, virtual currency is particularly volatile. This instability and the anonymity it provides to its users is not welcomed by the authorities, who are calling for stricter regulation.
Janet Yellen, Joe Biden’s new secretary of the treasury, recently warned that cryptomoney is « primarily used » to finance illegal activities and that the government must ensure that it does not become a means of laundering dirty money.
Tesla’s decision could shift the lines.
« That Elon Musk was an admirer of cryptomoney was well known. The fact that Tesla is investing on a large scale is taking investors to seventh heaven, » said Timo Emden, an independent cryptometrics analyst based in Germany.
In recent years, there has been an increase in the number of ways to buy Bitcoins, either whole or in fractions.
In October, the online payment giant PayPal launched a service for buying, selling and paying with cryptography, while Square, a company specialising in mobile payments, announced that it had invested $50 million in Bitcoin.
BlackRock, which manages thousands of billions of dollars on behalf of funds administering the pensions of civil servants and companies or wealthy individuals, also lent its legitimacy by adding virtual currency to the list of financial products in which it could invest at the end of January.
The question now is whether other large companies will emulate Tesla.
The manufacturer’s decision puts the spotlight on Elon Musk’s market power: every time he mentions a company or a virtual currency on his Twitter account, its value takes off temporarily.
It could also be closely scrutinized by the market policeman, with whom Elon Musk has had a falling out in the past.
« Given his recent comments, and the fact that he added #Bitcoin to his Twitter biography on January 29, this also raises the question of possible market manipulation, » says Wilson. For this CMC Markets expert, for example, it would be interesting to know whether Tesla invested $1.5 billion before or after this mention.
Elon Musk got a slap on the wrist from the SEC, which forced him to resign as chairman of Tesla’s board of directors after a tweet in 2018 mentioning a possible delisting of the group from the stock exchange when he was not financially strong enough for such a transaction.