The simple answer is, that it depends a lot on what happens with bitcoin’s price. And that’s a hard thing to predict.
Those rapid price changes could make trading bitcoin in for a car a great deal for some buyers, but it all depends on timing. For instance, if you bought one bitcoin back in July 2020, when the price was about $10,000, what once could buy a used Hyundai Elantra could now get you a brand new $38,000 Tesla Model 3 with a good chunk of change left over.
Ordinarily, new car prices change over rather long periods of time, such as weeks or months. However, bitcoin’s rapid value gyrations could make it difficult to set a crypto price and stick with it for any set amount of time.
“The firm cannot accept $35,000 for a Model 3 today and then $29,000 tomorrow, it is just not good business,” said Danyaal Rashid, head of thematic research at GlobalData, in an email. “In bitcoin, swings of 10% to 20% in price in a matter of days are not uncommon.”
Alternatively, advertised prices of Tesla vehicles could remain in local currency, such as US dollars or euros, while buyers can pay in bitcoin. That way, the amount one would pay in bitcoin would fluctuate day-to-day.
That would work similarly to other places that accept bitcoin for payment.
Bitpay, for example, is a company that manages bitcoin transactions for people and businesses who want to buy and sell products and services using bitcoin. It has arranged with a number of companies, including some luxury car dealers and AT&T, CNN’s parent company, to allow customers to pay with bitcoin. In these transactions, the customer’s bitcoin is usually converted into dollars, then transferred into the merchant’s bank account. (Bitpay is not currently working with Tesla.)
Tesla will, presumably, make the transaction more fluid by accepting actual bitcoin directly.
Obviously there are many items that cost less than one bitcoin, which most recently traded at around $46,000 a pop. In those cases, the currency will need to be divided into fractions in order to allow for payments in smaller, more exact amounts.
But you might rather hold onto that bitcoin.
That’s probably why Roadway Moving, a New York-based company that has been accepting direct bitcoin payments since 2017, has only seen a handful of customers take them up on it, said founder and president Ross Sapir.
“I can count on one hand the number of people who’ve paid in bitcoin,” he said.
At least Tesla vehicles hold their value well, said Eric Ibarra, director of residual values at Kelley Blue Book.
Like all cars and SUVs, Teslas lose value as soon as they’re purchased. However, they lose their value more slowly than comparable gas-powered vehicles, he said. So a Tesla is at least a better financial investment than most new cars.
What if the value of bitcoin comes crashing down, though?
That has happened at times, too. You could regret not cashing in your bitcoin for a nice car while you had the chance, especially if you were planning to buy a car in the near future anyway.
The fact is, it has really always been possible to buy a Tesla, or any car, for bitcoin. You just have to sell your bitcoin for cash first, then use that to buy the car.
Whether you cash your bitcoin in for dollars to spend on a Tesla or trade it in directly for a new Tesla keep in mind that you will have to pay taxes on the amount your bitcoin has gained in value while you’ve owned it — at least in the US, said accountant Ryan Losi.
In this way, Tesla has made bitcoin a more attractive way to buy one of its vehicles, at least for those who already owned the currency.