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Bitcoin

Tesla Buys $1.5 Billion Worth of Bitcoin, May Accept the Cryptocurrency as Payment in the Future (techcrunch.com) 189

Posted by msmash from the breaking-news dept.
Today in an SEC filing, Tesla disclosed that it has acquired $1.5 billion worth of bitcoin, the popular cryptocurrency. Moreover, the company noted that it may also accept bitcoin in the future as a form of payment for its cars, though it did allow that there is some regulatory uncertainty around that effort. From a report: As the news broke, the price of bitcoin instantly rose by around 7% to more than $40,000 per coin. Tesla had previously telegraphed that it had an interest in the cryptocurrency, however to purchase such a large block of the coin is notable. In its filing, Tesla writes that earlier this year it "updated [its] investment policy to provide [it] with more flexibility to further diversify and maximize returns on [its] cash that is not required to maintain adequate operating liquidity," adding that it has the option of putting cash into "certain alternative reserve assets" that include "digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future." Under that banner, the firm has "invested an aggregate $1.50 billion in bitcoin," going on to say that the well-known electric car company "may acquire and hold digital assets from time to time or long-term."
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Tesla Buys $1.5 Billion Worth of Bitcoin, May Accept the Cryptocurrency as Payment in the Future More

Tesla Buys $1.5 Billion Worth of Bitcoin, May Accept the Cryptocurrency as Payment in the Future

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  • Irresponsible gambling (Score:5, Interesting)

    by sinij ( 911942 ) on Monday February 08, 2021 @09:13AM (#61039748)
    Gambling with finances nearly brought GM down multiple times, but they got bailed out. It would be sad if gambling with very volatile Bitcoin would bring Tesla down, because nobody going to bail them out. More so, Wall Street and their stooge SEC hates Tesla, and bitcoin is an easy way for them to make Musk's life difficult.

    • I'd have to agree. I don't think this will end well. Using it as some sort of "investment" for it's cash balances strikes me as being rather foolhardy. Then again, given it's current valuation multiple, TSLA appears to have the ability to generate significant cash whenever it wants.

      Crazy times.

    • Re:Irresponsible gambling (Score:5, Insightful)

      by geekmux ( 1040042 ) on Monday February 08, 2021 @09:35AM (#61039802)

      Gambling with finances nearly brought GM down multiple times, but they got bailed out. It would be sad if gambling with very volatile Bitcoin would bring Tesla down, because nobody going to bail them out. More so, Wall Street and their stooge SEC hates Tesla, and bitcoin is an easy way for them to make Musk's life difficult.

      It was a $1.5 billion dollar gamble.

      February 2021 rough estimates put the net worth of Tesla at $100 billion, with market valuation twice that.

      I think, Tesla can afford it.

      Hell, Elon can afford to cover that bet personally if it went south.

    • When your share price is so sky high that you can issue a few more shares to do whatever you want, like pouring 1.5b into bitcoin. I doubt there is much risk to the company. Tesla will be fine.

      I don't see how Wall Street hates Tesla, just look at that market cap!
      • Dabbling in virtual currencies isn't going to help you actually retire to Mars, Muskie.

        • It will if you invest in Dogecoin to the moon!!!1

        • Re: (Score:2)

          by Guspaz ( 556486 )

          That's what Starlink is for. Specifically. They started an ISP so that they could dump the profit into their Mars colonization program, since colonizing Mars isn't exactly the sort of thing that normal investors would be interested in.

      • Re: (Score:2)

        by jythie ( 914043 )
        I keep thinking back to the South Sea Company... so much hype, so much investment, until one day they were a little TOO promising and investors snapped awake. Granted Tesla actually owns things and makes things, but its market cap still seems wildly out of proportion to its actual revenue.

      • Re: (Score:2)

        by hsmith ( 818216 )
        So why didn't they invest $1.5b into Tesla capabilities? More manufacturing, more design, more safety, more Super Chargers? This is not an investment in Tesla and it is a piss poor decision.

    • Re:Irresponsible gambling (Score:5, Interesting)

      by Gavagai80 ( 1275204 ) on Monday February 08, 2021 @09:43AM (#61039820) Homepage

      Sadly, it's not gambling. Every time Musk tweets about a cryptocurrency, the prices shoot up. They can make a fortune buying and selling based on his tweet timing, and technically it's not insider trading so it's not illegal.

      As with r/wallstreetbets, we've entered the age of social media financial "influencers" who can simply tell people to buy things to make it happen at unprecedented scale. Their friends, associates, or they themselves can make essentially unlimited money exploiting this absurd human behavior.

    • GM building terrible products nearly brought down GM.

      • There's this bizarre mythos around American megacorps that when they fail it's because of outside factors, yet if you actually look at the facts it's almost always due to those companies being grossly mismanaged by idiots looking to enrich themselves at the expense of their customers.

        • They're not generally idiots, they are probably very smart, but their interests are not the long term survival of the companies they run.
        • That's just human nature. When Jerry fails it's because Jerry is an idiot that did a bunch of different things wrong. But when I fail, it's because of all of these horrible things that happened to me which aren't really my fault. I'm just a victim of circumstance! I forget the term used to describe the behavior, but it's been fairly well studied and documented by psychologists. I don't know if anyone has looked at how it applies at a group or tribal level, but it's certainly likely that a largely American a

      • And when they make amazing products that people want to buy, they cancel production and send almost all of them to the scrapyard [wikipedia.org].

        • Range was limited and they used lead acid batteries, more of a proof of concept.

          • So what? Go watch "Who killed the electric car?", people wanted to buy the cars to keep them, GM refused and crushed the cars.

            A company that refuses to sell a product they're making, a product that people want to buy. What the fuck were they thinking?

    • Musk has been dabbling with rigging securities both with his stock, his tweets on game stop, his remarks on Dogecoin, and so forth. He got his hand slapped by the SEC for the time he pumped up his own stock. But he's been doing fine with Dogecoin and Bitcoin.

      I think were going to find eventually that bitcoin or some coin is going to find itself begging to be a regulated security. Otherwise all the schemes weve seen with the hong kong miners, the Reddit runs, and Celebrity touts are going to make this too

    • Re:Irresponsible gambling (Score:5, Interesting)

      by Anonymous Coward on Monday February 08, 2021 @05:13PM (#61041548)
      It's a good hedge against the Fed gambling with the value of the dollar

  • carbon footprint? (Score:5, Informative)

    by kirillart ( 1111591 ) on Monday February 08, 2021 @10:00AM (#61039866)
    Single bitcoin transaction ~741kwh wasted energy. Which is equal to 5000 km on Tesla3. I wonder how many transactions did they make to collect these 1.5B. I bet they didn't do it in single take. Buying Tesla car with bitcoin transaction may make the deal less environmentally friendly than buying ICE car with bank transfer or credit card.

    • Re:carbon footprint? (Score:5, Insightful)

      by Fly Swatter ( 30498 ) on Monday February 08, 2021 @10:05AM (#61039884) Homepage
      Tesla can sell their carbon credits for bitcoin, oh the irony.

    • > Single bitcoin transaction ~741kwh wasted energy. Which is equal to 5000 km on Tesla3.

      Nano: Green, Feeless, Instant.

      What Bitcoin was meant to be.

      Digital Currency.

      > I wonder how many transactions did they make to collect these 1.5B.

      Only need one from an exchange...

      Most bitcoin transactions occur offchain.

    • Re:carbon footprint? (Score:5, Interesting)

      by fleeped ( 1945926 ) on Monday February 08, 2021 @10:31AM (#61039976)

      Megelonmuskial tendencies... I really wonder how are they (tesla or fanbois) going to spin this, in terms of "tesla is using clean energy, good for the planet".

    • Re: (Score:2)

      by gweihir ( 88907 )

      Yep. Crap, utter crap and then things like this.

    • Re:carbon footprint? (Score:5, Interesting)

      by e3m4n ( 947977 ) on Monday February 08, 2021 @11:30AM (#61040196)

      Thank you!

      I came here to say exactly the same thing. I find the Hypocrisy that exists between global warming alarmist and cryptocurrency users beyond absurd. You cannot support both without being a poser. Bitcoin alone Consumes more energy than Switzerland [theverge.com]. In fact, cryptocurrency as a whole consumes more energy in a single day than an average third-world country consumes in an entire year.

      What is even more hypocritical is when said alarmist tries to pretend that you could use renewable energies to mine the currencies. No, not unless you want to spend more money in energy cost than you do in yields. Most mining is taking place in places like Kazakhstan where their electricity prices are as cheap as $0.001/kWh [bitcoin.com]. In the US they often flock to areas in Washington and other states where electric rates are only around 3 cents per kWh. The cheapest rates are often powered by coal, oil, and gas. None of which reduce the usage or emissions of carbon. If your stated goal is combating global warming, then the battles take place in the forms of efficiencies and consumption. Why on earth would someone deliberately WASTE electricity for the sole purpose of turning electricity into a monetary unit when doing so undermines every efficiency breakthrough in the last 10 years? To give a rather crude example, it is like going to the fertility doctor as a man with low counts, trying to have a kid, but at the same time you're jerking off 6 times a day.

      The battle for efficiency is a war that involves shaving off slivers of waste here and there, so that over a large scale, they amount to real savings. Saving $40 a year on electricity by buying an energy start hot water heater only amounts to maybe 250-350kWh. Thats a tough pill to push when Bitcoin consumption is in the Terrawatts while doing almost nothing besides creating bits and bites on a filesystem. In 2000 Al Gore claimed that by simply replacing ONE lightbulb in your house with one of those ugly corkscrew CFL lightbulbs would be enough to reverse global warming. Well I replaced every lightbulb in my house, possibly 100(?) I never really counted, with even more efficient LED bulbs, and every bit of that effort is pissed away by cryptocurrency miners. I have completely given up the fight to be more efficient to combat global warming. As long as this flagrant and prolific waste fraud and abuse is perpetuated on society, I am pissing in the wind and thinking its rain.

      • Also, it hurts poor people (Score:5, Informative)

        by Actually, I do RTFA ( 1058596 ) on Monday February 08, 2021 @01:09PM (#61040626)

        Energy isn't just cheap where it's cheap to produce. It's also cheap where governments subsidize it because the local populace cannot afford to pay full price. Or rural areas where electricity capacity was designed to deal with the population via a dam with a small amount of surplus, and a miner decides to use it as much as possible causing brownouts. Which has led to a couple of US lawsuits over rates that go from like a dime a kWh at normal uses to $100 a kWh beyond a certain usage. (Numbers from foggy memory, concept is real, numbers are fake)

        • Re:Also, it hurts poor people (Score:4, Informative)

          by e3m4n ( 947977 ) on Monday February 08, 2021 @02:17PM (#61040902)
          if you treat it like a zero sum resource, than even green energy is a finite quantity. That ventilator running for that covid patient in a hospital needs their power regardless. If some crypto farm chewed through all the renewable available, they will have to burn fossil fuels to continue to provide power to meet the demand. Every thousand kWh wasted is 1000 kWh in carbon if you think of it that way. The planet will never be 100% renewable if demand goes unchecked. Burning energy for hashing crypto is essentially lighting a bunch of $5 USD bills on fire to eventually get awarded a $100 CDN eventually, or the other way around... the type of currency isnt really relative to the point. Right now crypto literally burns and wastes energy for the sole purpose of assigning a value to a string of 1s and 0s based on a bunch of 'work' applied. But this 'work' has a real world consequence. Work for the sake of work makes no sense. The result of crypto work is not even tangible, its arbitrary and its value is completely unrelated to the work exerted. Its like plowing a field to have more water delivered to your door with no other step involved. No crops, no sale of said crops, no planting of crops. Just an Ox, a yoke, a plow, and some dirt.
    • Yeah but what if the mining is done on the Tesla on board computers which run on green energy.

  • What do they want? (Score:5, Insightful)

    by dromgodis ( 4533247 ) on Monday February 08, 2021 @10:03AM (#61039882)

    They could have bought these bitcoins without announcing it. By announcing, they want to accomplish something. Probably make money. Which seems to have succeeded.

    I wish I could buy something, tell people that I bought it, and it would increase in value immediately so I could make 7% in a day.

    • Re:What do they want? (Score:5, Insightful)

      by Randseed ( 132501 ) on Monday February 08, 2021 @10:18AM (#61039926)
      No kidding. I wish I was in Musk's inner circle because I would have bought some at $31000 last week and dumped it today when it spiked to $44,900. The problem with these kinds of investments, particularly Bitcoin which has a beta which is sky high, is that you never know when the bottom is going to fall out.

    • They could have bought these bitcoins without announcing it. By announcing, they want to accomplish something. Probably make money. Which seems to have succeeded.

      I wish I could buy something, tell people that I bought it, and it would increase in value immediately so I could make 7% in a day.

      What? You haven't read The Art of the Clickbait? Not quite the masterful bullshit artist that others come off to be?

      Buy a few million followers on InstaFaceTube, and start spewing. Influence is all that matters these days, not truth.

    • You can not do material actions such as this with a public company without announcing it to the SEC.

    • Re: What do they want? (Score:5, Informative)

      by crobarcro ( 6247454 ) on Monday February 08, 2021 @11:29AM (#61040186)
      No they couldn't, in fact the SEC require them to report something like this, and the only place they announced it was in their SEC filings

    • Re: (Score:3)

      by e3m4n ( 947977 )

      when you really boil it down to its essence, Tesla is supposed to be an all-electric solution to a global warming issue. By purchasing Bition, something far from environmentally friendly, you send the impression that you don't believe in the product you are selling. Its like taking a stance against slavery but somehow your house happens to be full of 'adopted' african kids living in closets in sleeping bags, ironing your laundry, cutting your grass, and cleaning your house.

      • cheaper to hire an illegal mexican than to feed, shelter, and watch a bunch of african kids

        sorry californians - we know why you dont want a wall - its because you are still racists

    • They didn't announce this randomly. They have to announce a 1.5 billion dollar investment in SEC filings. Which is what this was.

      Or would you rather not be able to tell where companies you invest in store value.

    • It's a public company. This was not an "announcement", just a standard SEC filing. They had to do it.
      It's absurd that they bought it though, it is the opposite of environmentally friendly, so absurd for a "clean" EV brand.

    • Re: (Score:2)

      by JeffSh ( 71237 )

      As a publicly traded company this is required to be divulged in their SEC filing.

  • Bitcoin: for the other 1% - this time that 1% is all the rich geeks

    So much for Bitcoin being the great equalizer of wealth!

    • Re: (Score:2)

      by Twinbee ( 767046 )
      If it makes you feel any better, he bought it at massively inflated values compared to 5 or 10 years ago.
  • Makes perfect sense, in a perverse, magical kind of way.

  • So buyers just have to wait for a big bump in value before buying a Tesla.

  • Why now? Why when BTC is at or near all time highs?

  • Tesla has just reversed any possible environmental gains from the use of their electric cars.

  • I can see Tesla getting into that big time, given the price of the high-end vehicles.

    There needs to be the same restrictions on cryptocurrency that there is on real currency: over $10k, the feds get to look at where it came from.

  • Your operating subscription fee is due (Score:3)

    by RogueWarrior65 ( 678876 ) on Monday February 08, 2021 @01:55PM (#61040814)

    It won't be long before you'll have to pay a monthly fee to run the car and it will bork your car right in the middle of heavy traffic with a motor cycle gang behind you.

  • Elon has been a big Bitcoin believer for a while, perhaps he had some extra bitcoins he wanted to convert into cash? ;-)

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