The idea of accepting Bitcoin for large-scale purchases or daily needs is a far-fetched one but that’s changing, at a relatively fast pace as more and more people see the future from a digital currency perspective. Recently, Tesla made it possible for people to buy their cars using Bitcoin with the rest of the world being able to do so in the near future.
Tesla’s initial investment in Bitcoin
It all started earlier this year when Tesla decided to buy $1.5 Billion worth of the digital currency, a move that gave the finance world one more way to assess the value of the company and its listed stock. The transaction was disclosed in an SEC filing as a plan to maintain flexibility in diversifying and maximizing return on invested cash.
While the company made close to $1 billion from its investment, the risks have increased as many view Bitcoin as a bubble that could burst at any time, affecting the stock price of Tesla. Nonetheless, analysis shows that other companies could follow suit with investments in alternative assets which to Elon are a slightly less dumb form of liquidity than cash.
Buying cars with Bitcoin
Tweets from Elon Musk have long been market-meaningful and heavy on sentiment and actual flow. When he tweeted about Tesla accepting Bitcoin as a form of payment, the cryptocurrency rose around 3%. This isn’t the first time that Musk’s tweets have caused actionable controversy as he previously managed to boost global demand for Dogecoin following a tweet about it.
This was also disclosed in an SEC filing where it mentioned that Tesla is likely to start accepting Bitcoin for payments towards acquiring a car from the electric vehicle maker. Initially, analysis shows less than 5% of transactions will take place using Bitcoin over the coming year or so yet broader acceptance is no longer a far-fetched reality.
There is one matter to keep in mind is the large carbon footprint of mining Bitcoin which can pick up steam in terms of controversy given that Tesla is all about clean energy yet with renewable energy on a quick rise, it may never lead to a critically charged situation.
Bitcoin and the future
Elon Musk is betting that more companies are likely to adopt Bitcoin and possibly invest in it as well. The idea is also gaining more support from the conventional finance world and the masses despite financial literacy setbacks and the ease of exchanging Bitcoins for real money when the need arises. Nonetheless, this is not an unplanned move from a true innovator and forward thinker always looking to advance humanity. At the very least, it deserves a second look and more consideration for those who are not informed of its potential as an alternative.
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