Tesla buys $1.5 billion in Bitcoin and will accept it for payment

CNBC reports that Tesla stated in a filing with the Securities and Exchange Commission that it bought the cryptocurrency for "more flexibility to further diversify and maximize returns on our cash."

Tesla also plans to accept Bitcoin as payment for goods and services, which makes it the first car company to do so. Starbucks, Whole Foods, and Microsoft also currently accept Bitcoin payments.

The electric carmaker will invest a significant portion of its cash into its Bitcoin investment, as it was reported that the company had $1.9 billion worth of cash and cash equivalents ready to spend at the end of 2020.

Tesla's owner Elon Musk has spoken in favour of cryptocurrency. He added "#Bitcoin" to his Twitter his bio and shared his support for the cryptocurrency on social media.

"I do at this point think bitcoin is a good thing, and I am a supporter of bitcoin" Musk said in a Clubhouse chatroom

Tesla's announcement has caused Bitcoin prices to surge to new heights, reaching a record $44,000 price this morning. Tesla shares have increased by 2.5 percent in premarket trading, however it was reported the company did warn investors of the volatility of Bitcoin prices in its SEC filing.