Bitcoin has taken a nasty slump of roughly 12 percent and has fallen into the high $49,000 range thanks to Elon Musk and Tesla.
Elon Musk Says “No” to Crypto Payments
Musk – the South African entrepreneur behind the electric car company – made headlines in February when he decided to add approximately $1.5 billion worth of bitcoin to the firm’s asset roster. He later decided that the time had come to make bitcoin a valid payment method for Tesla goods and products. This caused many analysts to go crazy with excitement, and the world’s number one digital currency by market cap surged through the roof.
One of the big things that bitcoin has always struggled with is its status as a speculative asset. For the most part, the currency – while popular – has always been seen strictly as a tool that can potentially increase one’s wealth overnight granted luck plays out to the person’s advantage. However, what many people forget is that bitcoin – along with many of its digital cousins – was designed to serve as a payment currency; something that would knock out credit cards and fiat.
Sadly, this has been a slow journey considering how volatile the cryptocurrency is. Many retailers are not willing to take a chance that they could lose profit within moments of completing a transaction, and to a degree, we cannot fault them. If you were to walk into a store and pay for $50 worth of merchandise with bitcoin, for example, and then the store does not convert it to fiat in time, this sets up a window that bitcoin could drop, meaning you will still walk away with everything you bought while the company has lost out.
This is not entirely fair, and thus several businesses have turned the idea of using crypto for payments away. Therefore, you can imagine the elation that true bitcoin fans had when it was announced that a large company like Tesla would be pushing forward with the bitcoin-as-a-payment-method agenda, but now it looks like Elon Musk is putting the brakes on.
A Huge Blow to BTC
Naturally, this is coming as a huge disappointment to many people. Yes, it is upsetting that bitcoin’s price has taken such a drastic turn for the worse, but it is even more upsetting that such a big barricade has been put in the asset’s way. To come this far as a potential payment method was something that many fans and traders could rejoice over. It was also widely whispered that Tesla was giving many other companies the confidence they needed to accept bitcoin for goods and services.
Now that Tesla is saying “no,” there is a good chance that other firms that were potentially thinking about bitcoin as “the next credit card” will suspend their financial choices as well.