How Has Tesla Impacted the Cryptocurrency Market?
The crypto industry is frequently influenced by high profile personalities such as Elon Musk, Jack Dorsey, Michael Saylor and Cathie Wood and news around external factors such as major companies taking a stake in certain coins, or third-party entities adding/revoking access for cryptocurrency to be accepted as payment for goods and services. The company that has had more impact than most in the crypto sector is Tesla. Long term, of course, the story about bitcoin is much more than Elon Musk, but Musk certainly sees bitcoin’s undeniable potential for the future.
In this post, we’ll be taking a look at the interactions of Tesla and Elon Musk with the cryptocurrency sector over the past few years, why their presence has such an impact, and why Musk continues to intertwine himself into the fabric of the digital economy.
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How Tesla is involved with the digital asset industry
Before we delve into Tesla’s impact in the digital asset market, here is a brief recap of who they are, who is involved, and why they have such a large standing in most areas of technological advancement.
Tesla
Founded in 2003, Tesla is a company that designs, develops, manufactures, and markets a range of high-performance electric cars that are incredibly technologically advanced. Amongst other features, Tesla cars are noted for their solar energy generation and energy storage facilities. In total, there are currently five different Tesla models on the market, including sedans, SUVs, and sports models. The vehicles are designed to be incredibly fuel-efficient and are fully rechargeable thanks to their lithium-ion batteries. As of 2016, Tesla has been trialling auto-pilot technology for their predominantly US customer audience. In addition to his role as CEO at Tesla, owner Elon Musk co-founded PayPal and SpaceX, furthering his stakes in multiple highly advanced technology industries.
Tesla’s standing within the digital asset space is substantial; it’s estimated that the company currently owns around $2.5 billion of bitcoin, making them one of the largest single-entity owners of the cryptocurrency in the world. Over the past few months, Musk’s stance on bitcoin has fluctuated wildly, with the CEO and entrepreneur going on record to say that Tesla would no longer be accepting the digital currency as a form of payment for their vehicles due to fears over the environmental impact of the mining process, then more recently deciding to invest further in bitcoin and retract this statement.
Important Events in the Tesla x Cryptocurrency Timeline
February 2018 – Musk states publicly on Twitter that he owns no cryptocurrency, besides 0.25 bitcoin that was sent to him by a friend many years earlier. Musk states that he does not know where this digital asset is held and he deems it to be lost. At today’s value, 0.25 Bitcoin is valued at around $11,500, which is substantially more than the value that Musk would have received for it back in 2019.
February 2019 – On a podcast with ARK Invest’s Cathie Wood, Elon Musk stated that Bitcoin’s structure is “quite brilliant”, but that he was “unsure” whether it would be the best use of Tesla’s resources (to get involved in crypto).
April 2019 – At the beginning of April 2019, Musk again tweeted on the topic of crypto – this time in reference to Dogecoin. His tweet read, “Dogecoin might be my fav cryptocurrency. It’s pretty cool.” Following these comments, the value of Dogecoin rocketed, seeing a significant rise that has been sustained for an extended period.
December 2020 – Musk again references Dogecoin in a tweet, following which there was another major boost in the value of the cryptocurrency. “One word: Doge.” was enough to send the market into a frenzy this time.
March 2021 – Elon Musk, again through Twitter, announces that “You can now buy a Tesla with Bitcoin” and that “Bitcoin paid to Tesla will be retained as bitcoin, not converted to fiat currency”. This is a major development in the story of bitcoin and cryptocurrency, with a mainstream retail provider allowing payment to be made using cryptocurrency for their goods.
May 2021 – However, bitcoin’s time as an accepted method of payment for Tesla vehicles was short-lived, with Musk announcing in May that Tesla would no longer be accepting bitcoin as a form of payment due to concerns surrounding the use of fossil fuels in the mining and transaction process involved with obtaining and managing cryptocurrency.
July 2021 – Just two months after revoking bitcoin’s acceptance as a payment method for their cars, the Tesla CEO again offered conflicting views on the matter, going on record at the B Word conference to say, “Most likely the answer is that Tesla would resume accepting Bitcoin”, but this will only happen once strict environmental studies have been conducted.
Over the coming months and years, we expect to see many more twists and turns in the relationship between Tesla, Musk and the crypto industry, but for the moment it appears that the hostility has subsided.
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