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Why Buying A Tesla With Bitcoin Isn't Really A Good Idea — For Now

March 29, 2021 5:04 am
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Why Buying A Tesla With Bitcoin Isn't Really A Good Idea — For Now

Buying a Tesla Inc (NASDAQ:TSLA) vehicle with Bitcoin (BTC) requires quick action and nerves of steel thanks to a small 30-minute purchase window and the inherently volatile nature of the cryptocurrency.

What Happened: Tesla will give users about 30 minutes to make a payment in Bitcoin from placing the order, a representative of the electric vehicle maker for the Northeast region said, CoinDesk reported.

This 30-minute payment window sheds some more clarity on the “Bitcoin Price Window” the company referenced in its terms and conditions. 

See also: How to Invest in Tesla Stock

There is no early-adopter discount available for those choosing to make payment for their vehicles with BTC either, as noted by CoinDesk.

As per the automaker's terms, it is the responsibility of the customer to input the alphanumeric code provided to make the payment accurately in the recipient field while making a BTC payment to it. 

The terms also contain a section on underpayments and overpayments ad make it clear that if "you transmit more than the Bitcoin Price, you will not be entitled to reimbursement of the excess amount."

Adding to the uncertainty of buying a vehicle in BTC from Tesla are the tax implications. The apex cryptocurrency is taxed as property instead of like currency. Although taxes on any resultant capital gains are less than income taxes.

Why It Matters: Last week, it was reported that If payment for the vehicle is not initiated in the price window, the price will expire and Tesla will provide a new price and window on customer requested.

See Also: Tesla Begins Accepting Bitcoin Payments

This time-sensitive purchase methodology is an attempt to mitigate BTC’s volatility. In the 24-hours leading up to press time, BTC touched an intra-day high of $56,610.31. The cryptocurrency was trading 1.14% lower at $55,465.73, a decline of over 2% from intraday highs.

This month alone, BTC surged to an all-time high of $61,683.86 and is currently trading over 10% below that level.

In 2013, a person had purchased a Model S through a car dealership in California for 91.4 BTC at the rate of $1,126 per coin, Coindesk reported.

The amount of BTC today equals $5.07 million approximately. A very expensive purchase indeed. 

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