Key Takeaways
- The Tesla company believes cryptocurrencies are a good store of value and can also be considered a legal tender. -Tesla stopped honoring payments in bitcoin because of its environmentally unfriendly POW mining style.
- Tesla has stated it will start honoring bitcoin as payment if renewable energy accounts for a 50% minimum of the Bitcoin network's mining power.
- Tesla is currently 2nd largest institutional "hodler" of bitcoin.
California based automobile giant Tesla has stated its intentions to revisit allowing intending Tesla owners to acquire its products using digital assets. The company made this revelation in its third quarterly filing with the security and exchange commissions. According to the company, there are futuristic plans in motion to begin accepting payments in cryptocurrencies.
The corporation didn't hold back in expressing its unshakeable belief in cryptocurrencies' futuristic potential as a store of value and legal cash. Tesla began accepting Bitcoin as payment for electric vehicle purchases in the first quarter of 2021. Tesla's move was part of a bigger strategy to embrace cryptocurrencies, with the corporation investing $1.5 billion in bitcoin between January and March.
As per Bitcoin Treasuries, Tesla presently owns roughly 43,200 bitcoins (BTC) valued at $2.7 billion at current pricing. Even after selling 10% of its stock, the corporation has achieved an unrealized profit of about $1.3 billion on that investment.
According to the website, Tesla is the second-largest institutional Bitcoin hodler, trailing MicroStrategy, which possesses roughly 114K BTC worth approximately $7.4 billion at current market rates. Square, a payments company, is third in line, with about 8,000 bitcoins.
Unfortunately, the company withdrew its support for bitcoin after it was reprimanded for promoting BTC amid the widespread belief that the proof-of-work mining style is environmentally destructive.
Four months ago, Tesla's CEO, Elon, stated that the company would explore reinstating Bitcoin payment support if renewable energy accounts for a 50% minimum of the Bitcoin network's mining power.
The development comes as Tesla's market valuation surpassed $1 trillion following a milestone partnership with auto rental business Hertz. For the first time, Tesla's stock price increased by nearly $1.00.
Given that Elon Musk has hinted that his company will soon start accepting payments for its vehicle in cryptocurrencies, do you think digital assets will see more adoption in the corporate space?
