Rival to Tesla Announces Cryptocurrency Plan
In a surprising move, electric vehicle company Faraday Future (NASDAQ: FFAI) has announced a strategic shift, venturing into the world of cryptocurrencies. The company, originally a competitor to Tesla, has revealed plans to invest in digital assets, including Bitcoin and Ethereum.
Faraday Future has already purchased $30 million worth of cryptocurrency, with intentions to increase this sum to as much as $1 billion. This move comes as several companies, including Tesla, have incorporated cryptocurrencies like Bitcoin as strategic reserves in their balance sheets.
The C10 Index, a basket of cryptocurrencies weighted by market cap, has been introduced by Faraday Future as part of this new investment strategy. Bitcoin makes up almost half of the C10 Index, with Ethereum (ETH) having a 24% share. However, the specific shares held by these cryptocurrencies were not detailed in the current sources.
This move by Faraday Future comes amidst production delays and limited vehicle deliveries. The company, founded in 2014, faced a setback in 2021 when it received a Wells notice from the U.S. Securities and Exchange Commission (SEC) related to its SPAC merger. The specific details about the SPAC merger that led to the SEC notice were not provided.
Tesla, another e-car company, initially purchased $1.5 billion worth of Bitcoin in February 2021, which propelled the cryptocurrency's bull run. Tesla currently holds 11,509 Bitcoin coins, making it the 11th largest Bitcoin treasury company.
However, Tesla's stock price has plunged by roughly 98% from its peak, a typical SPAC boom-and-bust story. This plunge is not related to the company's cryptocurrency investments but rather its production and delivery challenges.
Interestingly, Canadian light electric vehicle maker Daymak introduced a car capable of mining Bitcoin and Dogecoin in 2021, further demonstrating the growing interest in cryptocurrencies within the automotive industry.
It remains to be seen how Faraday Future's cryptocurrency strategy will impact its operations and future prospects. As of now, Tesla and Faraday Future are the only e-car companies that have invested in cryptocurrency treasuries.
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