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Musk confirms Tesla cars can be bought using bitcoin

Non-US customers able to use bitcoin to buy Tesla later this year

Tesla (NASDAQ:TSLA) chief Elon Musk announced on Wednesday that their cars can now be bought using bitcoin.

Musk, who confirmed in February that the company has purchased $1.5bn worth of bitcoin, made the announcement via a tweet on Wednesday.

With the continued volatility of the cryptocurrency, this means the price of a car could vary each day.

Elon Musk made an additional tweet outlining the company’s plan to organise its own internal software to handle bitcoin payments, which “operates Bitcoin nodes directly”. Nodes refer to computers that process bitcoin transactions.

Musk also confirmed that rather than convert payments into fiat currency, Tesla will retain them in bitcoin.

At present, only American customers will be able to buy Tesla using bitcoin, although Musk said his company would accept payments from outside the US later in the year.

The price of bitcoin, which has nearly doubled in 2021, rose on Musk’s announcement to above $55,000 having retreated over the past week.

“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,” Simon Peters, cryptoasset analyst at brokerage eToro, said in emailed comments. 

“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.”

Last week, Deutsche Bank analyst and Harvard economist Marion Laboure predicted “the next two or three years should be a turning point for bitcoin.”

“Bitcoin’s current valuation is pricing in a shift toward cross-border digital currencies; the hypothesis is that bitcoin, as the leader, will benefit from network effects and become an important means of payment in the future,” Laboure wrote in a report on the future of payments.

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