Bitcoin Gets A Shot In The Arm

Tesla’s $1.5 billion investment in cryptocurrency will encourage more corporates to gamble with it. Experts say India needs to join before it’s too late

- Manu Balachandran

For long, it had only remained the talk of the town. Of course, there were those who jumped on the bandwagon and invested in them, making millions over the past few years. Yet, for many others, bitcoins and cryptocurrencies have remained something of an enigma. Even as bitcoin prices surged to record highs, the lack of a central agency and government regulations meant the digital currency remained somewhat undesirable to many.

All that might change this year. On February 8, Tesla, the world's most valuable automaker, said the company has invested $1.5 billion in bitcoins. It sent the prices of bitcoin up by as much as 15 percent to rise above $44,000. Tesla’s CEO Elon Musk, who was once believed to be the man who invented bitcoins, has been rooting for digital currencies to become mainstream for a while.

“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity,” Tesla said in a statement on February 8. “As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets. Thereafter, we invested an aggregate $1.5 billion in bitcoin under this policy.”

The automaker, whose valuation far exceeds the combined valuation of the nine largest car companies globally, is also planning to accept bitcoin as a form of payment for its products in the near future.