‘Bitcoin paid to Tesla will be retained as Bitcoin’

CoinFlip CEO Daniel Polotsky pitches to Elon Musk to put his company's ATMs in Tesla dealerships and discusses his outlook for cryptocurrency.Video

Tesla CEO Elon Musk said the electric-car maker now accepts bitcoin as payment for its vehicles.

“You can now buy a Tesla with Bitcoin,” Tesla CEO Elon Musk tweeted early Wednesday. “Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.”

The news, which was telegraphed by Musk in February, sent bitcoin up as much as 4% to $57,120 a coin. At that price, the cryptocurrency was 6.73% below its all-time closing high of $61,243 set on Mar. 12.

Tesla shares rallied on the announcement before turning lower.

Ticker
Security
Last
Change
Change %

TSLA
TESLA INC.
394.36
-16.69
-4.06%

Tesla announced last month it had purchased $1.5 billion of bitcoin amid efforts to “diversify and maximize returns” on its cash. The company said it may invest its cash in more alternative assets, including digital currencies and gold bullion, in the future.

At that time, Tesla also said that it would begin accepting bitcoin as payment in the near future.

Bitcoin has gained wider acceptance from Corporate America over the past year as investment firms have parked more cash in the cryptocurrency. BlackRock Inc. and Morgan Stanley are among the Wall Street firms that have begun to dabble in the cryptocurrency.

MicroStrategy Inc., meanwhile, has led Corporate America’s charge into bitcoin, which has also been joined by digital-payment company Square Inc.

Microstrategy has plowed $2.171 billion cash into the cryptocurrency to purchase 90,531 bitcoins as of Feb. 24. The company’s CEO, Michael Saylor, was instrumental in Musk’s decision to invest Tesla’s cash in the digital currency.

“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC,” he tweeted in December. ”Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”