Tesla Briefly Embraced Bitcoin Payments in 2021
Thank you for reading this post, don't forget to subscribe!In March 2021, Tesla made headlines by announcing it accepts Bitcoin as payment for its electric vehicles. CEO Elon Musk, a vocal supporter of cryptocurrency, tweeted the news, stating, “You can now buy a Tesla with Bitcoin.” Musk further clarified that Tesla would retain Bitcoin payments rather than converting them to traditional currency (known as fiat).
Initially, this option was only available for U.S. customers who could place a $100 refundable deposit in Bitcoin. Tesla intended to expand Bitcoin payments to other countries in the future.
This announcement came on the heels of Tesla’s significant $1.5 billion investment in Bitcoin in February 2021. This investment was a major boost for the cryptocurrency market and caused Bitcoin’s price to reach a new all-time high (ATH). In the short term, the news of Tesla accepting Bitcoin as payment pushed the price up another 3% to $56,108.
Why did Tesla make this move?
Tesla’s decision to accept Bitcoin aligns with Elon Musk’s enthusiasm for cryptocurrencies and their potential to disrupt traditional finance. Additionally, the company may have viewed the move as a way to attract tech-savvy customers and solidify its image as an innovative leader.
The move, however, was short-lived.
However, by May 2021, Tesla made a U-turn and suspended Bitcoin payments. The company cited environmental concerns about the energy-intensive process of Bitcoin mining.
Legacy
While Tesla’s acceptance of Bitcoin was brief, it marked a significant moment in cryptocurrency history. The move demonstrated the potential for mainstream adoption of Bitcoin and brought heightened attention to the cryptocurrency market.
