Tesla hints it may accept crypto payments again

In its quarterly filing with the US Securities and Exchanges Commission, Tesla said that it may in the future restart the practice of transacting in cryptocurrencies

In its quarterly report with the US Securities and Exchange Commission (SEC), Tesla hinted it could start accepting crypto payments again.

The technological and automotive behemoth revealed that during the nine months that ended September 30, it bought an aggregate of $1.5b in BTC.

The company explained it believes “in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash”.

Tesla already did have a period when it accepted Bitcoin as payment at the beginning of the year. However, CEO Elon Musk decided to suspend this practice due to the energy needed to mine coins.

He then promised the company will resume Bitcoin transactions once it confirms there is reasonable clean energy usage by miners.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with the positive future trend, Tesla will resume allowing Bitcoin transactions,” Musk noted.

Tesla’s filing says the “fair market value” of Tesla’s digital asset holdings as of September 30 was $1.83b and it has been reported the company had to take a $51m impairment charge to account for its current Bitcoin holdings.

“We currently account for all digital assets held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350,” the company noted.

Tesla to use third-party custodial service for securing crypto

It also added it has the ownership of and control over its digital assets and it plans to use third-party custodial services to secure them.

According to sources familiar with the quarterly statement, Tesla currently holds around 43,200 Bitcoin worth an estimated $2.7b at current prices.

Even after selling 10% of its stash, the company has made almost $1.3b in unrealised profit from that investment.

This report came amid news that Tesla’s market cap topped $1t after securing a landmark deal with car rental company Hertz. Tesla’s share price also rallied about $1k for the first time ever.

Tesla is the second-largest corporate holder of Bitcoin, behind MicroStrategy, which holds around 114K BTC worth an estimated $7.4b at current prices. Payments firm Square is third on the list holding around 8,000 Bitcoins.

At the time of writing, Tesla stock stood at $1,025.11 in premarket trading.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

Previous Article

What is a smart contract?

Next Article

Charles Hoskinson's tour of Africa is underway

Read More Related articles