In the recent annual filing of the 10-K report with the Securities and Exchange Commission (SEC), Tesla claimed that it invested a massive $1.5 Billion in Bitcoin. This news by Tesla was responsible for taking the price of Bitcoin to $44,801. Tesla also claimed that they’ll start to accept payment in Bitcoin for their electric cars shortly.
Elon Musk, Tesla’s CEO, was in the favor of the most famous cryptocurrency even before the massive investment. He added “#bitcoin” in his Twitter profile just days before the investment. At that time, many investors and people who were observing the crypto market closely knew that big news would be arriving soon.
As the news broke out, many cryptocurrency trading platforms started facing some technical difficulties. It was because of the high number of people who were buying and selling Bitcoin at that time.
In the next section, we’ll talk about the practicality of accepting payments in bitcoin.
Will This Payment Method Be Practical?
As the prices of cryptocurrencies fluctuate a lot, there is hardly anyone who can predict when the next big movement in any cryptocurrency would happen. And investing heavily in one of the biggest cryptocurrencies is sure to give rise to doubts in many peoples’ minds.
Currently, no one knows how Tesla will accept payment in Bitcoin. Some believe that they would convert the Bitcoin into USD. Some companies that accept payment in Bitcoin follow this practice. But if Tesla wants to accept payment in Bitcoin without converting it, they have to make sure to liquidate the amount before the price starts fluctuating. Otherwise, if they set up the price for one of their cars at 1 BTC, they’d still have to accept 1 BTC, even if the price goes down. This would result in major losses for the company.
Roadway Moving, a company based in New York, started accepting payments in Bitcoin in 2017. The company’s founder and president Ross Sapir claimed that they have only had a few customers who paid in Bitcoin till now. Most of the people used traditional methods of paying for the services.
Surely, Tesla would not make it compulsory for people to pay using Bitcoin. They’ll provide an option for people who want to use cryptocurrency to pay for their electric cars.
Can Accepting Payment In Bitcoin Be a Game Changer?
This move by Tesla might be risky but Elon Musk changed many industries completely. He’s the CEO of SpaceX and Tesla. Before him, there were only a few people who had such an impact on people. He has commercialized electric cars throughout the world.
With SpaceX, he challenges NASA and says that the material it costs to build rockets is significantly lower than what NASA claims. He plans to get humans on Mars by 2026. He doesn’t only make big statements because he’s achieved most of what he has said.
Elon says, “I do at this point think Bitcoin is a good thing. I’m late to the party, but I am a supporter of Bitcoin.” There is a strong possibility that Musk might make Bitcoin the most widely accepted cryptocurrency to buy and sell things.
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