Buying a car with Bitcoin is a risky comedy story

Receive payment in Bitcoin but dare not keep Bitcoin

Elon Musk’s electric car company Tesla recently announced it has invested $ 1.5 billion in Bitcoin, and plans to accept payments in the cryptocurrency in the near future. That news pushed Bitcoin’s price to new highs, at one point surpassing $ 48,000. For one thing, no one knows how Tesla will accept Bitcoin.

Or to put it simply, no one knows if Tesla dares to hoard more Bitcoin. Of course, it is still expected that Tesla will take payments directly in Bitcoin and keep it as part of the overall crypto investment strategy, instead of exchanging for instant dollars like some car dealerships today. However, Tesla hasn’t revealed anything more about their plans.

Some large businesses currently allow customers to pay in Bitcoin, but through an intermediary money exchange application. For example, AT&T and Microsoft are both accepting payments for Bitcoin through BitPay, a cryptocurrency exchange payment gateway. BitPay is also a partner of many luxury car dealerships.

Even payments giant PayPal, which plans to bring cryptocurrencies to its network by mid-year, will execute transactions through intermediary partner Paxos Trust Company. That means neither the merchant nor PayPal has to hold the “virtual currency” and the risks involved.

In fact, in places that have never officially announced acceptance of Bitcoin, buyers can still use the fast exchange platform to exchange cryptocurrencies before buying and selling. Mason Borda, a crypto player, shared that he bought a Tesla Model 3 in 2016 with Bitcoin through the Shakepay app, and that Tesla still received cash payments.

Regarding the risk aversion of keeping cryptocurrencies, Georgia car broker Christopher Basha is quite understanding. Basha belongs to the group of car brokers who have received direct payments in Bitcoin and other cryptocurrencies since 2015, much earlier than Elon Musk’s Tesla.

Basha affirmed that accepting cryptocurrencies is a good marketing practice, but it is also quite risky for brokers who are not tech-savvy. He often sells Bitcoin soon after receiving payments from customers because he is uncertain about the stability of the cryptocurrency.

And even when Basha sold Bitcoin instantly, the process of processing about a few minutes on the trading platform also cost him 300-400 USD per car sold on average, due to exchange rate fluctuations. Keeping Bitcoin as an investment, Basha did not dare. Once he forgot the password to transfer Bitcoin, he panicked. “There is no middleman to rescue you,” said Basha.

Buyers at ease when paying with Bitcoin

If Tesla received payments directly in Bitcoin, customers would also suffer the loss. Chairman Danny Masters of the CoinShares platform said that the electric car company can only secure the exchange rate for a very short period of time. “They will still leave the price of the car in USD, and say you can pay with Bitcoin but the rate will only hold for 5 minutes,” imagined Danny Masters.

Mason Borda, for his part, said he regretted using Bitcoin to buy a car in 2016, as the value of the coin had grown dramatically since then. When Borda bought a car, each Bitcoin cost only about 400 USD, but by the beginning of this week it had risen to 47,000 USD. That means, the amount of 130,000 dollars that he bought the car back then is more than 15 million dollars.

With Bitcoin’s volatile and erratic ups and downs, Borda recommends: “I advise people not to buy expensive items with Bitcoin. The interesting feeling of doing this will quickly disappear if the price of Bitcoin rises suddenly. ”

Pietro Frigerio, the broker of luxury cars such as Lamborghini, Bugatti, or McLaren in California (USA), noted that the number of people paying in Bitcoin in the last wave has decreased. “People know they should wait for the rate to go up a bit more,” commented Frigerio.

Swissquote bank expert Ipek Ozkardeskaya commented: “If the price of Bitcoin drops dramatically after payment, the customer is like winning a Tesla car. too expensive”.