What Tesla’s Bitcoin purchase really means
Tesla has bought $1.5bn worth of Bitcoin. Big news. This sent the price of #BTC to a new all time high, touching $45,000.
Among the buying frenzy that ensued, many people missed a key point from the SEC filing in which Tesla disclosed their purchase:
“Moreover, we expect to begin accepting bitcoin as a form of payment… we may or may not liquidate upon receipt.”
This tells us 2 very important things.
- Tesla plans to accept payments in Bitcoin
- Tesla may choose not to convert those payments into dollars
This makes enormous claims for Bitcoin as both a store of value and a medium of exchange.
Critics of Bitcoin often say Bitcoin has no “inherent value” versus fiat money or traditional reserve assets like gold.
What they miss is that “inherent” value is in fact not inherent: it is a mutually negotiated and accepted consensus of value.
If companies like Tesla decide that they would rather use Bitcoin than dollars for transactions, then the dollar loses its “inherent” value as a medium of exchange.
If companies like Tesla decide they would prefer store their profits in Bitcoin over dollars, then the dollar loses its “inherent” status as a store of value.
Imagine if other large corporations like Amazon followed suit. The Federal Reserve can keep printing dollars, but if the big boys don’t want them, they are worth nothing.
The world is going to run on Bitcoin. And Tesla have noticed. Make sure you don’t ignore Bitcoin, or your life’s savings are going to be worth nothing far sooner than you think.
