+ 5.10
+ 1.52%
+ 2.91
+ 0.86%
+ 4.32
+ 1.05%
+ 2.31
+ 1.67%
+ 2.66
+ 1.64%

This Is How Tesla Could Let You Buy An EV With Bitcoin

February 9, 2021 5:07 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
This Is How Tesla Could Let You Buy An EV With Bitcoin

Tesla Inc (NASDAQ:TSLA) customers may soon be able to purchase a vehicle of their choice and pay for it using Bitcoin (BTC), but how would that process work? 

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.

See Also: Elon Musk Tweets Drove Crypto Community Mad But Mark Cuban Says Dogecoin 'Not A Bad Look'

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.

An example would be BitPay, a company that has accepted payments for Microsoft Corporation (NASDAQ:MSFT) and AT&T Inc (NYSE:T).

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. 

See Also: PayPal's Cryptocurrency Partner Sees 500% Surge In Trading Volume In A Month

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. 

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.

See also: How to Invest in Tesla Stock

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.

Related Articles

Cryptocurrency Market Overtakes Apple — The World's Most Valuable Company — In Market Capitalization

The market capitalization of cryptocurrencies, as tracked by CoinMarketCap, has exceeded that of the world’s most valuable company Apple Inc (NASDAQ: AAPL).  read more

Is Buying Tesla Stock In Tokens Rather Than Actual Shares The Better Choice?

Which is the better choice — buying regular shares of Tesla Inc (NASDAQ: TSLA) and other companies or buying the securities in a token format? read more

FTX's Pre-IPO Coinbase Contract Implies $140B Valuation, Community Weighs In

CBSE, a pre-IPO Coinbase contract listed on crypto exchange FTX, traded at $594 at press time, implying a valuation over $140 billion for Coinbase ahead of its direct listing on Nasdaq. read more

Coinbase Custody Adds Matic To Its Institutional Cryptocurrency Vault

Coinbase, the largest US cryptocurrency exchange, has added a new digital asset to its custodial service. Matic, the native token of Matic Network, can now be deposited and withdrawn by the institutional firms that utilize Coinbase Custody. read more