Tesla to Accept Bitcoin Payments Soon, invests $1.5 billion in the cryptocurrency
It is no secret that Bitcoins have found an increasing market across the world and is also quite the rage. New is coming in that Bitcoin holders will soon be able to use it as cash (a part of the investment) to buy a brand new Tesla electric car. As has been reported by Gujarat Samachar Newspaper, the automaker has announced an investment of around $1.5 billion in Bitcoin and has plans to accept the digital currency as a form of payment for their cars. Further, the report also states that it lead to a 15.4% shoot up in the prices of Bitcoin to around $44,500.
Elon Musk, the head of the electric car making company revealed that it is a new strategy. This was revealed in a filing with the U.S Securities and Exchange Commission, suggesting that investment in digital current and other alternative reserve assets may grow.
Bitcoin enthusiasts hail it for the security and safety net
While Bitcoin has definitely attracted many given the rarity as well as the security, it also is a volatile currency in the digital space since one cannot use it as a replacement for cash. As yet, it has only a handful of merchants where it can be used for transactions and it more like storing money in the form of something valuable, as holds true for Gold, among other things.
Meanwhile, many also use it as they aren’t completely trusting of the banking system or fear money laundering in any form. Now it will be interesting to see if others too, join the bandwagon and follow the footsteps of Tesla. None the less, how long will that be might depend on how much does Tesla’s attempt succeeds in the first place.
Bitcoin is a Smart Choice for Big Payments
An investment in a car is indeed a huge purchase and given the price swings, among other things, using Bitcoin could probably be a smart choice and also a befitting payment mode after all. However, as for the merchants who accept the payments, it might be a plausible risk.
As stated by law professor Anthony Michael Sabino, the announcement from Tesla was a rather wise move and will also deem its investment in Bitcoin as an alternative asset. Now, what makes this acceptable further, according to him, is the fact that one can use it as currency, however, the fact remains that it is not cash after all.
Meanwhile, Tesla had revealed earlier how it had cash as well as cash equivalents worth $19.4 billion post it sold its new shares so as to receive advantage of a risking stock price. Dan Ives, Wedbush Securities has mentioned that with this movie, the company has enabled diversifying and maximising its return, thereby also being flexible as far as cash is concerned. Further, unlike companies like General Motors or Ford, Tesla can in fact accept digital currencies as payment given that it is not dependent on dealerships otherwise.
It is no secret that Bitcoins have found an increasing market across the world and is also quite the rage. New is coming in that Bitcoin holders will soon be able to use it as cash (a part of the investment) to buy a brand new Tesla electric car. As has been reported by The Hindu, the automaker has announced an investment of around $1.5 billion in Bitcoin and has plans to accept the digital currency as a form of payment for their cars. Further, the report also states that it lead to a 15.4% shoot up in the prices of Bitcoin to around $44,500.
Elon Musk, the head of the electric car making company revealed that it is a new strategy. This was revealed in a filing with the U.S Securities and Exchange Commission, suggesting that investment in digital current and other alternative reserve assets may grow.
Michael Venuto, co-portfolio manager of the Amplify Transformational Data Sharing fund, revealed how it looks like Musk seems to embrace Bitcoin not only as a transactional tool, but also accept it as a store of value for his own trust/assets. Venuto has a small amount of Bitcoin but also invests in companies that deal with such technologies.
Using Bitcoin for purchase will still take time
The announcement might have come as quite the pieces of news for those who have made money with their investments in Bitcoin, however, it is going to take time for the transactions to actually take place as far as buying a car is concerned. Meanwhile, Executive director of insights at Edmunds.com, Jessica, reveals how she does not feel this practice will become very common given that many take cars through loans, or lease them, and not everyone pays cash. In addition, buying a such an item at cryptocurrency might seem to be a risk and also not feel like a comfortable purchase. However, others feel that it will become a trend in the times to come.
Many also feel that this decision could simply be a result of the tastes and choices that Musk possesses. What will be interesting to see further is understand whether the company will ultimately get any possible advantage in the future with this decision from the company.
