- tesla has bought and sold much of the bitcoin cryptocurrency, and was also taking it as payment for evs, but suddenly stopped earlier this month.
- The reason cited by CEO Elon Musk was that bitcoin mining is too harsh on the environment; he said that tesla would not accept it for electric vehicle purchases until production of the coin becomes more environmentally friendly.
- musk stated that he would not sell tesla’s own bitcoin the company, and it is likely that at least some form of cryptocurrency will be accepted again to buy a tesla eventually. meanwhile, dealerships across the country are now accepting bitcoins for other brands.
update 5/16/2021, 9:30 PM m.: elon musk, CEO of tesla, has hinted that he might sell the company’s bitcoin holdings, in classic musk fashion, via a twitter response to a post by @cryptowhale, as reported bloomberg tonight. the provocation caused a sharp drop in the value of the cryptocurrency.
Like most activity in the modern stock market, Elon Musk’s sudden move away from accepting bitcoin as payment for tesla has little basis in reality, except for speculators in cryptocurrencies and tesla stocks.
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It was a short-term gamble that paid off for tesla: buying $1.5 billion worth of bitcoin at the close of 2020 when it sold for less than $20,000; sell 10 percent during the first quarter of 2021 when bitcoin approached $50,000; make a profit of $101 million. That profit accounted for nearly a quarter of Tesla’s $438 million of net income that quarter. In late March, either before or after the sale, Tesla began accepting bitcoin on its website for crypto customers who could make a digital deposit or the coin’s worth of an entire car. then on may 12, tesla withdrew it.
“Cryptocurrency is a good idea on many levels and we think it has a promising future, but this cannot come at a great cost to the environment,” Musk said that day in a formal statement on Twitter. “Tesla will not be selling any bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”
the price of bitcoin, which had reached almost $60,000 in the days before musk’s tweet, was already falling sharply all day before sinking below $48,000 in the following hours. thousands of people and bot accounts responded to musk, as they usually do, but this time offering lesser known cryptocurrencies in the hope that a tweet from musk, an endorsement, in any measure, would skyrocket their bank accounts.
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“Working with doge developers to improve system transaction efficiency. Potentially promising,” Musk tweeted the next day. that was days after he was on saturday night live may 8th and said “yeah it’s a hustle” when asked about dogecoin the joke that turned into a serious cryptocurrency after musk it popularize with tweets in April. Unsurprisingly, his comments on the TV show sent Dogecoin on a downward slope, more than 35 percent, according to Coindesk. lo and behold, after musk’s tweet on may 13, it’s going back up. Tesla shares also fell sharply below $600, one of the lowest drops this year, and already in after-hours trading this weekend, he is trending higher.
tesla’s experiment with bitcoin didn’t help customers, who were warned that they could overpay for their cars if the currency exchange rate changed and that tesla couldn’t refund them if it did, that hackers could steal currency, that bitcoins could be “lost or destroyed”, and that if they entered the wrong wallet code, the bitcoin could go anywhere other than tesla. not the problems that happen to people who use real currency.
Although you won’t be able to buy a tesla (for now) using bitcoin, there are dealers across the country that have already started accepting the cryptocurrency. Two examples, located by Reuters and CNBC, are the Houston luxury car dealership’s Oak booth, which displays a shiny bitcoin on its home page, and the Alabama and Georgia Kia dealerships Carriage Car Group. Post Oak’s owner told CNBC earlier this year that the dealership has already sold 17 cars using bitcoin. transportation will take it only if the buyers can pay the full cost of the vehicle purchase with the currency.
As long as you realize it’s still a complex and unregulated market, and arguably still a bit shady, it’s still possible to buy a vehicle in some places using bitcoin. As for tesla, expect the cryptocurrency to become a medium of exchange again sooner or later.
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