This Is How Tesla Could Let You Buy An EV With Bitcoin
Not The First: The Home Depot, Inc (NYSE:HD), Amazon.com, Inc (NASDAQ:AMZN) subsidiary Whole Foods, and even Mark Cuban’s Dallas Mavericks already allow customers to pay for their stuff in BTC. Tesla might take a similar approach to these businesses.
A Go Between: A likely scenario is that if the Elon Musk-led company accepted BTC its customers would transfer their cryptocurrency from their wallets to a processor, which would then convert it to fiat money and send the amount to Tesla.
Cut Out The Middle Person: Another way forward could be for Tesla to skip a go-between and do it all by themselves. Musk, who is one of the founders of PayPal Holdings, Inc (NASDAQ:PYPL) is no stranger to the payments business. The payments company itself started its users buy and sell cryptocurrencies last year, but it has not gone solo in doing so.
A Volatility Workaround: A roadblock in the broader acceptance of BTC is its sheer volatility. On Monday, the cryptocurrency soared as high as $47,584.10 for a brief window. In the early hours of Tuesday, at press time, it was trading 20.81% higher at $46,644.95. Bitcoin soared past the $45,000 mark for the first time on Monday.
No fucking way I spend my #Bitcoin on a Tesla.. I already spent 5 grand of #Bitcoin on a sofa today. One hour later came the announcement about Tesla buying Bitcoin, and boom The fucking sofa went up 10% in value in 1 hour..
— Anders Bengtsson (@bengtsson999) February 8, 2021
If Tesla were to use in-house Bitcoin processing, it could set up a guaranteed exchange rate with customers for a short period of time, according to Danny Masters, Chairman of Coinshares, a digital asset management firm, Reuters reported.
"They will likely continue to price Teslas in dollars and then say, ‘Wire us dollars or send us bitcoin and if you send us bitcoin, the price is good for five minutes," said Masters.
Price Action: On Monday, Tesla shares closed nearly 1.3% higher at $863.42 and fell 0.56% in the after-hours session. On the same day, Grayscale Bitcoin Trust (OTC:GBTC) closed 20.62% higher at $45.69.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.