Tesla Will Accept Bitcoin for Cars, Buys $1.5 Billion Worth of the Cryptocurrency

If you’ve been mining bitcoin for the past few years, we have some good news. First, the value of bitcoin has surged in the last few days after Tesla announced it recently bought $1.5 billion of it. Second, you’ll likely be able to buy a Tesla with it pretty soon, and we don’t mean the stock.

The automaker revealed the purchase earlier this week, Reuters reports, paying for it with cash, and it plans to accept the cryptocurrency for its electric cars, at least on a limited basis for now. What’s more, a Tesla insider seems to have tipped off Reddit forum members about Tesla’s purchase of the cryptocurrency a month ago, according to Reuters.

If you have a feeling that Elon Musk personally played a role this move, there’s a reason for that: The Tesla CEO had been tweeting about bitcoin and dogecoin over the past several days in a pattern that seems to have accelerated since the dramatic short squeeze of GameStop stock last month, with both cryptocurrencies and several others surging in value following his tweets.

The tweets alone would not have been especially surprising were it not for the fact that Tesla made a very substantial purchase of bitcoin. It’s unclear just how long ago Tesla made the decision to purchase the cryptocurrency, or to sell cars in exchange for it. The value of the cryptocurrency has already surged 62% this year, after impressive gains in 2020, as Reuters notes.

“We expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt,” the company said in its 2020 filings, according to Reuters.

The latest moves by Tesla are notable for a number of reasons, signaling an increased acceptance of the cryptocurrency (at least by Tesla) that had largely remained a province of online retail and trading. Needless to say, Tesla is also the first major automaker to signal that it would sell its cars in exchange for the cryptocurrency, even though bitcoin-specific pricing has not been announced for its vehicles just yet.

Since Tesla’s purchase of bitcoin was disclosed, expert opinion has varied widely about the company’s long-term plans for the cryptocurrency. One thing industry observers appeared to agree on is that non-institutional investors have tended to react to Musk’s tweets, especially when it comes to buying stocks or cryptocurrencies that he has tweeted about, which in turn drives up their market value as investors flock to buy it.

People have certainly bought cars from dealerships after converting their bitcoin to dollars, but Tesla could well be the first automaker to accept it directly, if it follows through on its statement of intent.

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