Tesla now accepts bitcoin as payment for its cars

25 Mar 2021

Image: © Moose/Stock.adobe.com

Elon Musk has been bullish on bitcoin as a payment method, with Tesla investing $1.5bn in the cryptocurrency earlier this year.

Elon Musk is doubling down on his affinity for bitcoin by accepting the cryptocurrency as payment for Tesla cars.

“You can now buy a Tesla with bitcoin,” Musk tweeted yesterday (24 March). The payment option is currently only available in the US, but he added that international markets will follow later this year.

The outspoken chief executive has long been a proponent of cryptocurrency and earlier this year, Tesla invested $1.5bn in bitcoin. That investment and Musk’s fervent tweeting about crypto helped send bitcoin’s value soaring in recent weeks.

After his announcement this week, bitcoin’s price ticked up but has since dropped slightly again. It’s currently trading at about $52,700.

According to Musk, Tesla will use internal, open-source software for transactions. He added that the company will not convert bitcoin to other currencies after payment. He provided little in the way of specifics but it suggests that Tesla may continue to hold bitcoin after accepting it.

This differs from the approach of other large companies that have accepted cryptocurrency as payment. These businesses typically convert the digital currency into dollars after the transaction to avoid much of the price volatility that’s common in crypto.

While bitcoin’s price has soared in recent months and more institutional investors have taken notice, the cryptocurrency is still not a pervasive payment method in day-to-day transactions for ordinary people.

Price volatility and slow payment processing times have been some of the barriers to mainstream adoption and investors have viewed the digital asset more as a strategic investment rather than a currency.

Tesla’s acceptance of bitcoin could go some way to changing that but the move has not been without its critics either, with some saying that it undermines Tesla’s electric car vision. Tesla makes electric cars but bitcoin and the massive computing power it requires result in huge emissions. This has been the source of much ire against cryptocurrency.

Jonathan Keane is a freelance business and technology journalist based in Dublin