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Why Tesla Accepting Bitcoin Is 'Seminal Moment' For EV Stock, Crypto World

March 24, 2021 12:52 pm
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Why Tesla Accepting Bitcoin Is 'Seminal Moment' For EV Stock, Crypto World

Tesla, Inc.'s (NASDAQ:TSLA) CEO Elon Musk announced Wednesday in a tweet that the EV maker has begun accepting bitcoin payment for car purchases.

The announcement comes within a month-and-a half after the company first said it invested in Bitcoin as a treasury reserve and will begin accepting bitcoin payments in the future.

The Tesla Analyst: Wedbush analyst Daniel Ives maintained a Neutral rating on Tesla with a $950 price target. 

The Tesla Thesis: Tesla's announcement regarding allowing U.S. customers buy its cars/products using bitcoin was least expected at this point in time, as Wedbush was bracing for a second half of 2021 time frame, Ives said in a note. 

Customers outside of the U.S. can avail of this facility later this year, the analyst said.

Related Link: How Bitcoin, Demand Are Driving Tesla Shares Lower

Tesla has also posted support materials on its website, with the company planning to use internal/open-source software to conduct these transactions, he said. 

"This is a seminal moment for Tesla and for the crypto world with Musk now cutting the red ribbon on Bitcoin transactions within the broader Tesla ecosystem."

The analyst said he expects less than 5% of transactions to be through Bitcoin over the next 12 to 18 months. This number, the analyst said, could move higher over time as crypto acceptance starts to ramp over the coming years.

This is a potentially game-changing move for the use of Bitcoin from a transactional perspective, according to Ives.

The news, the analyst said, formalizes the strategy of Musk and Tesla "diving into the deep end of the pool of bitcoin and crypto" from a transactional perspective.

TSLA Price Action: At last check, Tesla shares were down 1.53% to $652. 

Related Link: Apple Is Better Off With Cryptocurrencies Than EVs: Analyst

Photo courtesy of Tesla. 

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