Tesla has invested $ 1.5 billion in bitcoin, according to the company’s statements to the US Securities and Exchange Commission (SEC). In addition, in the near future, Tesla customers will be able to pay with cryptocurrency for the company’s products.
According to the document, in January 2021, Tesla updated its investment policy to be “more flexible in further diversifying and maximizing cash income that it does not need to maintain normal operating liquidity.” In this regard, an audit committee was formed under the board of directors, whereby the company can now “invest some of this money in certain alternative reserve assets, including digital assets, gold bars, gold ETFs and other assets, as indicated below.”
“Subsequently, we invested a total of $ 1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or for the long term. Moreover, we intend to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially under limited conditions. We can liquidate it or not do it after receiving it, ”adds the firm.
The company also notes that it considers its Bitcoin reserves to be “highly liquid”.
“However, digital assets can be subject to volatility in market prices, which can be adverse when we want or have to liquidate them,” she says.
A whole section of the document is devoted to the risks of digital currencies:
“The proliferation of such assets is a fairly young trend, and their long-term adoption by investors, consumers and businesses is impossible to predict. Moreover, lack of material form, reliance on technology for issuance, transaction validation, and decentralization can expose their integrity to the risks of malicious attacks and technology obsolescence. Finally, it is unclear and may not be clear in the future to what extent securities laws and other requirements apply or may apply in the future to such assets. If we hold digital assets and their value falls in relation to our purchase price, it could damage our financial condition. ”
For accounting purposes, Tesla will treat digital assets as intangible assets with an indefinite lifespan. Such assets will be revalued on a quarterly basis, and if their value falls below the original value, the company will record the difference as an impairment loss.
Against the background of this news, the bitcoin rate rose above $ 43,000.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
