Unsurprisingly, the announcement prompted a massive surge in the cryptocurrency's value.
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Tesla has announced it could soon accept bitcoin as payment for its electric cars and other products, after purchasing almost US$1.5 billion (AU$1.95 billion) of the cryptocurrency.

The announcement, issued in a filing to the US Securities and Exchange Commission, prompted a 14 per cent surge in bitcoin's price to an all-time high in excess of US$43,000 (AU$55,000).

The American electric car maker said it had purchased the cryptocurrency following a change to its investment policy, which now allows it to "hold and acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss".

The company said this policy could also see it accept bitcoin as payment for its products "on a limited basis".

"[W]e invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term," Tesla stated in the filing.

"Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt."

Tesla said the bitcoin move was part of a bid to "further diversify and maximise returns on our cash".

The company's CEO, Elon Musk, has been a long-time supporter of bitcoin and said in a recent interview that he believed the cryptocurrency was "on the verge of getting broad acceptance".

“I do think at this point bitcoin is a good thing,” Musk said. “And, so, I am a supporter of bitcoin. Like I said, I was late to the party, but I am a supporter of bitcoin. And I think, bitcoin is really on the verge of getting broad acceptance by conventional finance people.”

Shortly after news broke about Tesla's plan to accept bitcoin as payment, Musk took to Twitter to post about another, lesser-known cryptocurrency called Dogecoin, also prompting it to surge to a record high.

Analysts are suggesting Tesla's announcement could further legitimise bitcoin as a mainstream currency and see more major companies follow suit.

"A bunch of CEOs have been standing around the pool asking who will go first. @elonmusk just did a cannonball," Eric Turner, the US-based vice-president of market intelligence at cryptocurrency research firm Messari, tweeted.

It's not yet clear how or when Tesla plans to begin accepting the cryptocurrency as payment for its cars.