Tesla CEO Elon Musk has announced that US customers can buy Tesla cars by paying through Bitcoin (BTC). He also said that his company will directly operate Bitcoin nodes. Musk made it clear that the Bitcoins the company accumulates will not be converted to fiat.
In an SEC filing in early February 2021 after purchasing US$1.5 billion worth of Bitcoin (BTC), Tesla had signaled that it intends to accept BTC for products. This option of paying using Bitcoin will be available to US-based customers only. If a customer visits Tesla’s US-based IP address, he/she will find a new Bitcoin payment widget added to the checkout options of the site. However, later this year, Bitcoin as a payment option will be available to customers outside the US.
Elon Musk is stressing that the Bitcoins accumulated through selling its cars will not be converted to fiat money. This suggests that the company is using Bitcoin not only as a transactional medium but an investment tool.
Musk’s tweet read “Tesla is using only internal & open source software & operates Bitcoin nodes directly.” With this development of running its own dedicated Bitcoin nodes, Tesla will join a network of global peer-to-peer operators who will host and synchronize the Bitcoin blockchain.
As this news hit the market today, BTC witnessed a 2.9% jump in price from US$54,056 to US$55,630. The terms and conditions of Bitcoin specifically mention that currently, Tesla accepts only Bitcoin (BTC) as a payment option for its products and no other cryptocurrency. The company’s terms and condition states:
“You may not make purchases with us using any other digital asset, including Bitcoin fork products, such as Bitcoin Cash and Bitcoin SV. Our Bitcoin digital wallet is not configured to detect or receive digital assets other than Bitcoin.”
eToro’s crypto asset analyst, Simon Peters, has said:
“Tesla’s decision to both accept payment for its cars in bitcoin and hold that bitcoin on its balance sheet rather than convert it to dollars will likely build more momentum for the cryptoasset. Tesla and other companies are showing that crypto is here to stay, and its mainstream adoption is only going to increase. In terms of market dynamics, as more companies hold bitcoin on their balance sheet, so the finite supply is depleted even more, and this is likely to cause a supply-side squeeze and boost prices over the longer-term.”