Tesla Inc. invested $1.5 billion in Bitcoin and signaled its intent to begin accepting the cryptocurrency as a form of payment to buy their cars, sending prices to a record after the vote of confidence from the electric-car market leader.
Chief Executive Officer Elon Musk’s Palo Alto, California-based manufacturer said in a filing Monday it made the bet on Bitcoin after updating its investment policy last month to allow it to buy digital assets.
“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.
Bitcoin prices surged to new highs Monday following Tesla’s announcement, reaching a price of at least $44,200.
Dan Ives, managing director at Wedbush Securities, joined “Squawk Box” by phone to discuss the implications of this news. Tesla buying bitcoin will have ripple effect with other companies also buying Bitcoin for their Treasury Reserve instead of buying gold, bonds, handing out large dividends or buying back share.
#Bitcoin is the signal, and it’s getting louder. In retrospect, it was inevitable.
In related news, Apple should develop Apple Wallet into a crypto-exchange and add Bitcoin (BTC-USD) or another cryptocurrency to its balance sheet, said RBC analyst Mitch Steves. In fact Apple can, like Tesla, allow users to buy the rumored Tesla car with Bitcoin.
Steves: “The wallet initiative appears to be a clear multi-billion dollar opportunity for the firm (potential for well over $40 billion in annual revenue with limited R&D).”
The analyst notes that Apple would immediately capture market share and offer improved security compared to other companies with the exchange mode, such as Square and PayPal.
Purchasing Bitcoin would drive more users to Apple Exchange and boost Bitcoin prices, notes Steves.