On Monday, Tesla reported that it had purchased $1.5 billion in the largest cryptocurrency, Bitcoin.

The company's position was revealed in a filing with the Securities and Exchange Commission. Tesla claims that Bitcoin will allow for “more flexibility to further diversify and maximize returns on our cash.”

Furthermore, the automaker stated that it would start accepting payments in Bitcoin for its products, “subject to applicable laws and initially on a limited basis.” Tesla is investing a large portion of its cash into the cryptocurrency. According to the company's most recent filing, it had around $19 billion in cash and cash equivalents at the end of 2020.

Tesla CEO and founder Elon Musk has been an advocate of cryptocurrency in the past. His positive tweets supporting Bitcoin and Dogecoin have resulted in significant rallies. For example, two weeks ago Musk added #bitcoin to his Twitter bio, not long after Bitcoin rallied 20 percent. Two days later he publicly stated, “I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin.”

This is not the first time Musk's presence on social media regarding asset prices has been called into question. In 2018, he was charged with fraud after tweeting that he could potentially take Tesla private at $420 per share.

Following Tesla's investment Bitcoin surged to a new record high on Monday, peaking at around $44,200. Tesla shares were up as much as 2 percent on Monday.

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Economics, Finance and Investing