The announcement fueled a short rally in BTC price despite its losing strength against the USD. Accepting Bitcoin payment is a major step in getting it into the mainstream financial ecosystem.
Bitcoin (BTC) which seemed under pressure earlier today has now reversed its trajectory northwards. Thanks to Elon Musk who once again came to the rescue of the Bitcoin investors. Earlier today, Musk announced that automobile giant Tesla Inc (NASDAQ: TSLA) has now started accepting Bitcoin (BTC) payments against its car purchases.
Musk’s official announcement was enough to add fuel to the Bitcoin price. Despite the Dollar gaining strength, Bitcoin overshadowed these concerns surging 5%. At press time, Bitcoin (BTC) is trading at $57,023 with a market cap of $1.067 trillion.
Apart from just announcing that Tesla will accept Bitcoin payments, Musk made further disclosures. He added that Tesla shall use its own internal and open-source software as the company plans to run Bitcoin nodes directly. Furthermore, he added that Tesla will continue to hold all the payments that it received in BTC.
Tesla is using only internal & open source software & operates Bitcoin nodes directly.
Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.
— Elon Musk (@elonmusk) March 24, 2021
Musk’s announcement has created a major buzz in the crypto space. Many analysts are now it calling it a major step to making Bitcoin (BTC) payments mainstream. Popular crypto market Alex Kruger writes:
“Nothing like good old fashioned bullish news to reverse a short-term downtrend. Yes, Tesla accepting Bitcoin payments and running its own Bitcoin nodes is massively bullish. Others will follow”.
Tesla and BTC
Tesla’s adventure with Bitcoin is nothing new. Last month, the company announced its $1.5 billion Bitcoin purchase thereby making it one of the biggest corporate entries into Bitcoin. Tesla is still now the only top-ten company in the world to have put its reserve cash in Bitcoin.
So far, Tesla’s Bitcoin bet has paid the company pretty well. During its S1-form filing with the US SEC, Tesla said that it purchased Bitcoins at a price of around $33,000. At the current BTC price, Tesla has already made over $1 billion in profits. Although the company hasn’t yet booked its profits, Tesla’s Bitcoin earnings are more than Tesla’s profit for the entire 2020.
Tesla has kickstarted a major trend of bringing corporate America closer to Bitcoin. But Tesla is not the only company to accept Bitcoin as payments. recently, a report emerged that even Microsoft is accepting Bitcoin as an in-game payment option for its Xbox ecosystem.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.