Elon Musk, 2nd richest man in the world and CEO of Tesla (NASDAQ: TSLA) announced Tuesday that people can now buy the EV cars in the United States using Bitcoin. The announcement comes one month after the company bought $1.5 billion worth of Bitcoin.
Musk tweeted, “you can now buy a Tesla with Bitcoin.” Bitcoin is decentralized cryptocurrency and not tied to any banks. The untraceable digital token trades through blockchain instead of the mainstream financial system. Since last year, Bitcoin jumped from $17,000 to an all-time high price of $60,000, turning average people into millionaires overnight.
You can now buy a Tesla with Bitcoin
— Elon Musk (@elonmusk) March 24, 2021
The move by Tesla is the first of its kind. Last month, Bank of New York and MasterCard announced that they’ll be accepting the digital currency. However, the decision to allow buying vehicles in the cryptocurrency gives Bitcoin more trust-worthiness compared to other altcoins.
Tesla sets its own Bitcoin refund policy
According to a support page on Tesla’s website, customers can buy a car using Bitcoin. Meanwhile, buyers outside the U.S. may use Bitcoin to pay for a Tesla car using Bitcoin “later this year,” Musk said.
Musk explained Tesla uses “internal” and “open-source software.” The billionaire and CEO of SpaceX concluded the company “operates bitcoin nodes directly.” Installed Nodes on a Bitcoin network verifies transactions while avoiding duplicate crypto spending. The electric-car manufacturer’s cars cost between $38,000 and $124,000.
Tesla’s refund policy cautioned people that returning electric cars and obtaining refunds will give them two options. Buyers can either get a refund in Bitcoin or in U.S. dollars. The company added that it reserves the right to repay customers the exact price Bitcoin is worth at the time of the deal.
In consequence, Tesla will make a profit from Bitcoin’s volatility and price increase in the digital currency as well as fiat currency.
Wedbush analyst Daniel Ives, mentioned in a research note Wednesday his firm wasn’t expecting Tesla to start accepting bitcoin payments until the second half of this year.
“This is a seminal moment for Tesla and for the crypto world with Musk now cutting the red ribbon on Bitcoin transactions within the broader Tesla ecosystem,” said Ives. “We expect less than 5% of transactions to be through bitcoin over the next 12 to 18 months however this could move higher over time as crypto acceptance starts to ramp over the coming years.”