Electric car maker Tesla bought $1.5 billion worth of bitcoin and said it will begin accepting it as a form of payment in the near term.

Elon Musk, founder and CEO of Tesla, is not afraid to take risks when it comes to manufacturing cars, exploring space, and now entering the world of cryptocurrency. Tesla made a $1.5 billion purchase of bitcoin last month and is planning to allow consumers to purchase its products using the cryptocurrency.

The company announced the purchase in its annual report filed with the Securities and Exchange Commission. In the filing's section outlining operational risks, Tesla said in January 2021 it updated its investment policy to provide it with additional flexibility to diversify and maximize returns on its cash. As part of the updated policy, the company is permitted by its board of directors to invest cash in alternative reserve assets, including digital assets such as bitcoin.

Thus the company invested a significant portion of its approximately $19.4 billion in cash and cash equivalents in bitcoin. Tesla further revealed that it expects to begin accepting bitcoin as a form of payment for its products in the "near future" but on a limited basis initially.

Bitcoin is a cryptocurrency that has been around for a little more than a decade. An alternative to government-controlled currency, the decentralized, non-physical currency keeps track of balances on a public ledger. It is not currently considered legal tender.

The company acknowledged a variety of risks associated with holding cryptocurrency, including loss of value relative to its purchase price and vulnerability to cyber-attacks.

Bitcoin prices rose sharply Monday following the announcement. Musk's recent social media support for bitcoin and Twitter activity referencing Dogecoin have been credited with propelling the cryptocurrencies to new record prices in recent days.