Tesla is shopping for $ 1.5 billion price of Bitcoin and plans to just accept it as cost for merchandise

Elon Musk, CEO of Tesla Inc, dances on stage during a delivery event for Tesla China-made Model 3 cars in Shanghai, China on Jan. 7, 2020.

Aly Song | Reuters

Tesla announced Monday that it had bought $ 1.5 billion worth of Bitcoin, according to a report with the SEC.

The company said it bought the bitcoin in order to “have more flexibility to further diversify and maximize the returns on our cash.” In addition to the purchase, Tesla announced that it would accept payments in Bitcoin in exchange for its products. This would make Tesla the first major automaker to accept Bitcoin as a means of payment.

The move immediately raised questions about CEO Elon Musk’s behavior on Twitter over the past few weeks, where he was credited with increasing the prices of cryptocurrencies like Bitcoin and Dogecoin by posting positive news about them and therefore encouraging more people to buy.

Bitcoin prices rose up to 12% on the Monday following Tesla’s announcement, hitting a price of at least $ 43,200. The Tesla share gained more than 2% in premarket trading. Tesla warned investors about the volatility in Bitcoin price in its SEC filing.

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