Rolling live coverage of business, economics and financial markets as US electric carmaker promises to accept payments in cryptocurrency
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On it goes: bitcoin is now up 17% through the $44,000 mark and hitting $44,868.98.
That is a new record. Tesla’s purchase is generating fortunes across the world.
The Tesla bitcoin purchase really raises a whole host of questions, but here are two of the most pressing: will Tesla’s investors appreciate their stock being exposed to the wild movement of bitcoin? Can Elon Musk legally tweet bitcoin memes when pumping the price will increase the value of the company he runs?
Musk recently replaced his Twitter biography with “#bitcoin”, but had not previously revealed any holdings.
It raises a real question about possible market manipulation. Musk’s tweeting record is chequered to say the least and he has had his knuckles rapped by the SEC in the past. The filing simply says that the investment policy was updated in January 2021 and ‘thereafter’ the company invested an aggregate $1.5bn in Bitcoin. Timing would appear critical.
Tesla also says it may acquire and hold other digital assets. The move will also raise questions for fund managers who may not want to invest in a company with this kind of risk on its balance sheet – we know bitcoin is very volatile – this is normal FX risk x100. Tesla is now starting to take on big FX risk – this may not worry a lot of investors, but some conservative types might be concerned.