"Tesla to Accept BTC as Payment" - Flip the Coin

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Cryptocurrencies are still seen in the grey area. For some, they are digital assets that are like digital golds, diamonds, or silvers whereas, for others, they are purely for the daily transaction that are designed to be used in the exchange of fiat money / Credit Cards.

According to the newly growing perspective, Bitcoin, Ethereum, Litecoin-like veteran, and limited supply coins might be seen as assets (as they are proven to decentralized(!) and they have been operating for a long while) but the rest of them put under the category of digital currencies.

Even though the discussion has small-scale effects on the retail investors' financial decisions, the case, as expected, makes a lot of sense for institutions that are expected to report any financial action. Knowing all the tips and tricks of this era, the genius Elon has been following a perfect way without being hurt.
The Verge News

Initial Reflection: Bitcoin as Store of Value for Tesla

The first step that Elon took was declaring that %1 of value will be locked in Bitcoin as the reserve of the company. While 7/24 shilling Doge, why BTC? Because Doge is for "fun" though it's perfectly used to raise awareness on cryptocurrencies.

As Bitcoin does not have an owner and it's majorly accepted as a store of value, it was a safe and brilliant move. Besides, the percentage is just %1. The first step was taken and the conditions were observed. Now that it's fine so far, here comes another step.

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Bitcoin as Medium of Exchange for Tesla

Now that there is no problem with storing Bitcoin, It does not necessarily buy directly from markets; it can be taken from people as a currency. Yet, it will not be converted to USD.

it will not be converted to USD.

By this move, Elon eliminates all the possible questions that might be put forward by the regulators concerning fluctuation of the price, taxation, etc. However, he fixes the problem from the very beginning. As long as he pays the taxes, he can even accept shells as a payment way 💁🏽‍♂️

I'm delightfully watching his amazing moves as if he is playing chess with SEC or other regulatory parties. At that point, I questioned that will it be limited to Bitcoin? Nope.

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Next and the problematic phase: Accepting Other "Decentralized" Currencies.

This is the point that is not as safe as earlier because there are owners/representatives or well-known figures of the rest of the coins in the Top 15-20 etc...

After Bitcoin, the scope of acceptable payment options will be among the Top 20-30 at most imo as the other coins are not likely to be welcomed due to their low volume, unknown figures behind, etc. Yet, I feel that ETH, BCH, LTC, DOT, and LINK are the ones that are possible to be accepted as a payment option.

There are 2 problems with the altcoins:
1- They are not seen as decentralized as Bitcoin.
2- They have more volatility than Bitcoin.

While the former problem is, to great extent, related to regulations, the latter will directly effect the revenue of the company. However, what will be done if they are accepted as payment?

  • Will they be converted into USD? (Another Taxation + speculations)
  • Will they be stored like Bitcoin? Risky + any huge amount of buy/sell brings manipulation claims)

In my opinion, they are more likely to be stored, and to save itself from the risk of being short of liquidity, Tesla may apply limitations for these payment methods if they are faced with an overdose of attention.

Lastly, the way the purchasers made money in cryptocurrencies is another iceberg at this point. I do not even want to speculate on it 😄
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TL; DR

Elon the genius took wise steps by first declaring %1 of the reserve of Tesla in Bitcoin proving that Bitcoin is viewed as a Store of Value. Next, by accepting just Bitcoin, the argument can be supported that they still see Bitcoin as SoV but they can also pile up from customers as they will not be converted into fiat. Though BTC is used as a medium of exchange, in reality, Elon is some steps ahead to save himself.

For me, so far so good but the rest of these actions are kind of risky due to the nature of altcoins. I think Top coins can be used as a payment option but what's going to be done with all these cryptocurrencies? Will they also be stored or turned into fiat? If they are going to be converted into fiat, what about price impact and other taxation for these market actions?

The water is about to boil and we will have a clearer vision about the future of altcoins or for some altcoins that are complying with certain criteria. We'll see...

Please do not hesitate to share your ideas with us 😌

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