Tesla plans to start accepting bitcoin for its cars, which will make it the first automobile company to accept it directly for its vehicles without conversion to dollars.
Bitcoin values have increased by 62% in 2021 alone, after even more significant gains over the past year. The value of bitcoin has increased more in the last few days after Tesla announced it recently bought $1.5 billion of bitcoin. So in no time, Tesla will start accepting bitcoin as a mode of payment for its cars and other products.
Bitcoin has drawn followers for its scarcity and security, but the digital currency still is not widely accepted to be paid for goods and services. It’s mostly been a store of value, with some limited merchants like Overstock accepting bitcoin for payment. It’s also used by those mistrustful of the banking system or criminals seeking to defraud people of money.
Maybe other major companies will follow Tesla’s footstep in investing in Bitcoin or accepting it for transactions is still very much in doubt. A vehicle is a large product to purchase, which could make Bitcoin a better fit to pay for it, but the wild price swings in Bitcoin could be a remarkable risk to any merchant who decided to accept it.
Tesla said last month that it had cash and cash equivalents of $19.4 billion after selling shares to take full advantage of a rising stock price.
The Tesla CEO, Elon Musk had been tweeting about bitcoin and dogecoin over the last few days in a pattern that seems to have accelerated since the dramatic short squeeze of GameStop stock last month, with both cryptocurrencies and several others increasing in value following his tweets.
The tweets alone would not have been especially surprising if it was not for the fact that Tesla made a very huge purchase of bitcoin. It’s still unclear just how long ago Tesla made the decision to make a purchase cryptocurrency or to sell vehicles in exchange for it.
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