Tesla buys $1.5 billion in bitcoin and plans to start accepting it as payment for products

Tesla Inc CEO Elon Musk dances onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai, China, January 7, 2020.

Aly Song | Reuters

Tesla announced Monday that it bought $1.5 billion worth of bitcoin, according to a filing with the SEC.

The company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash,” according to the filing. In addition to the purchase, Tesla said it would start accepting payments in bitcoin in exchange for its products as well. That would make Tesla the first major automaker to accept bitcoin as payment.

The move raised immediate questions around CEO Elon Musk’s behavior on Twitter recent weeks, where he has been credited for increasing the prices of cryptocurrencies like bitcoin and dogecoin by posting positive messages about them and therefore encouraging more people to buy.

Bitcoin prices surged as much as 12% Monday following Tesla’s announcement, reaching a price of at least $43,200. Tesla shares were up more than 2% in premarket trading. Tesla warned investors of the volatility of bitcoin’s price in its SEC filing.

This is breaking news. Please check back for updates.

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