- Tesla’s recent move to accept Bitcoin as a form of payment has attracted interest among several long-term investors of the cryptocurrency.
- Though the investment choice is a critically acclaimed one, it may also be an elaborate cover to offset its PR nightmares.
- Tesla also stated that the firm will not convert its Bitcoin reserves to fiat currency anytime soon, leading to small yet significant profits.
Companies employ several tactics to stay relevant and stand aloof of any potential issues that may distort the public’s perception. Tesla had ticked all the boxes. It rode the crypto trend by investing a considerable amount of $1.5 billion in BTC, thereby cementing its position as a strong supporter of cryptographic assets. Its recent move to hodl any Bitcoins it receives may also be a part of a strategy to ensure that its perception of the company is not distorted.
Bitcoin payments not incentivized:
As it wildly varies with deviations even as high as 700%, Bitcoin has seen renewed interest, especially in the pandemic period. Even as the price fluctuates and some amateur investors are cashing out as soon as they reap profits, seasoned investors are “hodling” Bitcoins (a slang for holding/hoarding Bitcoins and not converting it to fiat money). Such investors would undoubtedly find it hard to part with their cryptos. Moreover, Tesla has not offered any viable discounts on crypto payments leading to a further discouragement on their usage. Lastly, any spare change (sats or 0.00000001 BTC) the firm receives in any transaction is icing on the cake.
Even if an investor can clear the tax reporting obstacles in the US, which in itself is highly off-putting, Tesla only allows for a 30-minute window to make the transaction, failing which another window has to be requested. All these factors may seem as though paying with Bitcoins has no significant benefits than transactions in fiat currency.
But what if all of this is just a part of a giant strategy to counteract potential PR problems? The firm is currently facing troubles over quality and safety in China. Coincidentally, US regulators have also begun inspecting the firm’s autopilot technology. By embracing Bitcoins, CEO Elon Musk may have sneakily diverted all attention away from these issues, all while increasing sales in the process. A true genius of a plan.
However, the current situation is nascent to gauge whether the alleged strategy works and only time will tell if Tesla rakes up profits in the forthcoming months.
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