Tesla invests $1.5 billion in bitcoin, will start accepting it as payment

It also casts a new light on Tesla chief executive Elon Musk’s recent Twitter campaign surrounding Dogecoin, a low-valued, meme-based cryptocurrency that started as a joke between two engineers. In the past week, Musk’s tweets have been credited for its surge in price. On Sunday night, after Musk tweeted, “Who let the Doge out,” it surpassed 8 cents for the first time. It now has a market capitalization of more than $10 billion and is up 1,266 percent year-to-date, according to Coindesk.

Musk’s seemingly random support for the memecoin could raise questions now that Tesla plans to integrate cryptocurrency into its business strategy. The SEC has tangled with Musk over his Twitter use in the past, including a 2018 lawsuit following tweets in which he said he had “funding secured” to take Tesla private at $420 per share. (Musk later said this was a joke, and that the $20 million penalty was “worth it.”)

Dan Ives, managing director of equity research at Wedbush Securities, called Tesla’s gamble on bitcoin a potentially “game-changing move.”

“This morning’s news formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto,” Ives said in comments emailed to The Post. “Ultimately, investors and other industry watchers will be watching this closely to see if other corporations follow the lead of Tesla on this crypto path.”

Tesla shares jumped 2.4 percent in early trading Monday.

Musk has been more vocal in his enthusiasm for cryptocurrency in recent days. In an early February interview on Clubhouse, the popular audio chat app, Musk called himself a bitcoin supporter and said he’d been “late to the party.” He also briefly added #bitcoin to his Twitter bio.

“Bitcoin is really on the verge of getting broad acceptance by conventional finance people,” Musk said in the interview.

In the SEC filing, Tesla said it was branching into bitcoin and other alternative assets to maximize returns. But it also warned that such currencies are mired in uncertainty and could continue to be “highly volatile.”

“The prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable,” Tesla said in the filing. “Their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence.”

Bitcoin has seen wildly popularity during the pandemic, as the maelstrom of economic uncertainty and market volatility brought on by the coronavirus pushed more people to consider alternative currencies. The digital coin, which was initially priced at a single cent when it was created more than a decade ago, now has a market capitalization of more than $812 billion.

But the rush of recent popularity still won’t eclipse the risk for most companies, Craig Erlam, senior market analyst with OANDA, said Monday in comments emailed to The Post.

“Some other companies may be tempted to follow but the vast majority will be far too cautious to expose themselves to the volatile world of cryptos,” Erlam said. “Musk isn’t one to shy away from bold moves though and has now put his money (well, Tesla’s) where his mouth is.”