Tesla allocates 7.7% of gross cash to Bitcoin

Tesla (TSLA) sent shockwaves through financial markets on Monday after the US Securities and Exchange Commission confirmed that the electric car maker had added bitcoin (BTC) to its balance sheet.

Tesla’s most recent Form 10-K for the fiscal year ended 31. December 2020 ended with a $1.5 billion allocation to Bitcoin. As Bitwise researcher David Loant notes, Tesla’s exposure to BItcoin represents about 7.7% of its gross currency position.

According to its last 10K filing, @Tesla had $19.4 billion in cash and cash equivalents (gross) or $98 billion (net of debt and capital leases).

Taking these figures as a starting point, $1.5 billion in #Bitcoin equates to an allocation of 7.7% of gross cash or 15.1% of net cash. https://t.co/FgRpzRcXBh pic.twitter.com/tDVqJGtj2Q

– David Lowant (@dlawant) February 8, 2021

He said Tesla’s cash will be $19.4 billion by the end of 2020, or $9.8 billion after deducting debt and capital leases.

Buying Bitcoins puts Tesla at the top of the corporate ladder. Only one other company, MicroStrategy, has acquired more digital assets as part of its strategic reserves.

News of Tesla’s involvement in the bitcoin market sent prices soaring Monday. As reported by Cointelegraph, the price of BTC peaked at around $45,000, easily breaking its previous high. The market capitalization of bitcoin has exceeded $800 billion for the first time.

In addition to adding BTC to its balance sheet, Tesla plans to use the digital assets as a means of payment. Moreover, the BTC he receives will not be liquidated in cash, but added to his balance sheet.

Tesla is leading Bitcoin’s launch at a crucial time in the bull market. Given Elon Musk’s penchant for moving markets, Tesla’s new bitcoin could accelerate adoption by retailers in the short term.

Bitcoin has also attracted the interest of large corporations. Last week, Microstrategy’s webinar on buying bitcoins attracted over 1,400 participants.

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