The price of Bitcoin rallied again on Wednesday, nearing fresh record highs, after Tesla (TSLA) - Get Report CEO Elon Musk said the company will now accept the world’s largest digital currency as payment for its electric vehicles.
The price of bitcoin rose 4.7% at $56,936 following a tweet from Musk on Wednesday that “you can now buy a Tesla with bitcoin.” Musk also said that paying by bitcoin will be available to customers outside the U.S. later this year.
The newly minted “Technoking” added that Tesla only will use internal and open-source software and that any bitcoin paid to the company will be retained as bitcoin and not converted to a fiat currency.
"Tesla is using only internal & open source software & operates Bitcoin nodes directly," he said. "Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency."
Nodes are computers that validate bitcoin transactions.
Musk published his tweet soon after Twitter users noticed the updated bitcoin support for all models of Tesla's cars across online U.S. stores. "Elon," "Tesla," and "#Bitcoin," quickly became trending hashtags on the social media platform.
The bitcoin payment details on Tesla's website were directed to a web wallet address on BTC.com, according to cryptocurrency news site, The Block.
Tesla gave bitcoin its own endorsement last month with a $1.5 billion investment in the cryptocurrency that Musk himself said was “simply a less dumb form of liquidity than cash,” but that Osprey Funds' CEO Greg King sees as more of an endorsement of what bitcoin really is: an investment that holds value and has appreciation potential.
Indeed, Tesla's decision in of itself is likely to convince other Fortune 500 companies and their CEOs also to include bitcoin on their balance sheets as well as in their investment portfolios, King told TheStreet.
Tesla and Musk haven’t been shy about embracing bitcoin as both an asset and form of payment. In addition to Musk adding “Technoking” to his title this month, Tesla Chief Financial Officer Zach Kirkhorn added “Master of Coin” to his own official corporate moniker.
To be sure, not everyone thinks bitcoin is the next greatest thing. Bank of America in a recent research report called bitcoin "dirty" and "volatile," arguing that prices are driven by little more than fund flows, big-name buyers and miner rewards cuts.
The bank added that CO2 emissions tied to the computing power needed to make the cryptocurrency are equal to that of Greece.
At last check, Tesla shares were down 0.66% at $657.79. Bitcoin, meantime, has gained 90% year to date and up more than 800% in the last 12 months.