Tesla announced that it bought $ 1.5 billion in bitcoin and would begin accepting the cryptocurrency as payment, according to a SEC filing on Monday.
The company said it bought bitcoin for “more flexibility to diversify and maximize the return on our cash.” The news makes Tesla the first automaker to accept the cryptocurrency.
Carson Block, founder of Muddy Waters Research, doubts any federal interference in CEO Elon Musk’s plans.
“The SEC just doesn’t have a track record of success against Elon Musk, so I hope any effort in that direction will go, basically it would be a dead end.”
Dan Ives, managing director of stock research at Wedbush, sees a positive side to stocks.
“This is Tesla and Musk diving into the bottom of the pool in encryption and it’s something that’s been spreading for a while, and ultimately they’re really putting substance behind their vision. I think it’s something that Street will have a different view from, but in the end … this will definitely be seen as a positive aspect for the stock. “
Mike Novogratz, founder of Galaxy Digital, sees this as a pioneering move that other companies will adopt.
“Every company should study how to accept digital currencies, digital payments as part of its business scheme. It’s not that difficult. It’s what customers want, it’s where the world is moving to. And I think it’s getting ahead of curve, and I think you’ll see every company looking to find out how they could, from McDonald’s to Bojangles, whatever you want. “
Mohamed El-Erian, chief economic advisor at Allianz, said this should give bitcoin a boost.
“What did Tesla say to you? Two things. One is that this will be a form of payment. And the second is that this is an investment vehicle. Those are two powerful endorsements for the notion, I want to emphasize the notion, that bitcoins are a coin, a money, because money is a store of value after all. Money is a form of payment. So, yes, it will create more momentum. As for the reaction, it will be everywhere. Some will see as visionary, others will say ‘Wait a minute, if I want to invest in bitcoin, I will do it directly, I don’t need Tesla to do this for me.’ … So, you will see a wide range of reactions, but for bitcoin holders, [Monday’s] good news.”
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