Tesla Might Accept Bitcoin for Payments Once More

Tesla’s decision to stop accepting Bitcoin earlier this year was one of the most consequential points for the crypto industry. It had ripple effects that lasted for months, with a market downturn that tested the strength and patience of many market participants.

Tesla Might Accept Bitcoin for Payments Once More

However, the auto manufacturer is back and now appears to be rethinking its decision to abandon the leading cryptocurrency.

Never Say Never

In a filing with the Securities and Exchange Commission (SEC) last month, Tesla noted that it could reconsider its stance on cryptocurrency payments in the near future. The auto manufacturer explained that it believes cryptocurrencies to be a strong store of value and channel for making payments. So, it could very well move into the space once more.

The announcement appears to have been a heel turn from earlier this year when Tesla chief executive and noted crypto enthusiast Elon Musk announced that the company would no longer accept cryptocurrency payments. In a tweet at the time, Musk explained that Tesla had come to see Bitcoin’s possible dangers to the environment. Being a company focused on environmental sustainability, Tesla had to rethink its decision to accept crypto for payments.

Tesla’s decision was a massive one. It had significant effects on the market, especially with many taking it as a shot at crypto. Tesla reminded the general public that it still holds Bitcoin, with the company having purchased $1.5 billion worth of the asset back in February. However, while the company remained invested in Bitcoin, accepting it as a payment method would not work.

Tough Love Forces Crypto to Sit Up

Another interesting effect of Tesla’s decision was the conversation that it forced concerning crypto and its effects on the environment. Experts have agreed that Bitcoin mining - and its transactions - can indeed be very detrimental to environmental sustainability. And, if progress is to be made, it will need to come from everyone.

Several initiatives have been able to keep Bitcoin more energy-efficient since then. Square and Blockstream are partnering to build a solar-powered Bitcoin mining plant, and a Bitcoin Mining Council has been formed to address some of the environmental impacts of Bitcoin’s mining process. Musk himself had suggested the formation of the council, although its website shows that the billionaire isn’t a member.

It is pretty clear that these advancements are still not able to take Bitcoin to where it needs to be. However, with more initiatives like these coming up, we could see some progress being made. Eventually, companies will be more comfortable with accepting Bitcoin as a means of payment.

Musk had said in June that Tesla would consider accepting Bitcoin once more when they notice improvements in its carbon footprint.

”When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the billionaire said.

There’s no doubt that the market will be looking to see the progress made and whether it would be enough to force companies like Tesla to accept crypto payments once more.

Tesla’s Bitcoin Bet Paying Off Nicely

While Tesla is mulling the resumption of crypto payments, the company’s investment in the coin remains pretty solid. With Bitcoin looking to hit a new high of $70,000, Tesla has now made well over $1 billion from Bitcoin. Data from Bitcoin Treasuries shows that Tesla’s Bitcoin holdings are now worth $2.87 billion - a profit of $1.3 billion on its investment.

Tesla is now the second-largest institutional holder of Bitcoin. The company trails only MicroStrategy - the Virginia-based business intelligence services provider that has so far invested $3.1 billion into Bitcoin. With the current market prices, MicroStrategy’s Bitcoin haul is reported to be worth $7.59 billion - a gain of over 100 percent.

Payment processor Square, mining firm Marathon Digital Holdings, and top crypto exchange Coinbase make up the remainder of the top 5 institutional Bitcoin holders.

It is worth noting that Tesla’s Bitcoin holding would have been even more if the company hadn’t sold off 10 percent of its portfolio back in Q2. In its earnings report for the quarter, the company confirmed that it had sold about 46,000 BTC at an average price of about $50,000 per token. From that sale alone, Tesla booked about $128 million in gains.

So far, Tesla hasn’t shown a desire to purchase more Bitcoin. The company, whose market capitalization crossed the trillion-dollar mark a little over two weeks ago, has been treading more carefully as its operations turned profitable this year. The company is also working on massive expansion plans as it looks to strengthen its lead in the electric vehicles industry.

Regardless, the industry awaits a time when Tesla - and other companies - will be comfortable accepting Bitcoin for payments once more.

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