This week the crypto market went nuts when Elon Musk revealed his company began accepting Bitcoin as a form of payment for any Tesla model.
While this caused prices to initially soar, reading the fine print reveals a bit of a catch-22 situation for anyone who uses the cryptocurrency to pay. Here’s what you need to be aware of if you’re considering spending BTC on a Model S, Y, or 3.
TESLA BEGINS ACCEPTING BITCOIN AS A PAYMENT OPTION
Over time, the eccentric entrepreneur and visionary became enamored with the cryptocurrency market, often commenting on the state of things. More recently, however, after a rumored chat between Musk and MicroStrategy CEO Michael Saylor where the Bitcoin bull let Musk in on his BTC buying playbook, Tesla revealed it also had bought BTC to add to corporate treasure reserves.
At the same time, the company revealed the plan to eventually support accepting Bitcoin as a payment, which was just enabled on the car manufacturer’s website this week.
Musk’s tweet announcing the addition of Bitcoin payments going live, sent the price of the leading cryptocurrency by market cap soaring higher initially, but a rejection has led to serious volatility since.
Bitcoin pumped immediately after Musk's tweet, but was used to fake out traders | Source: BTCUSD on TradingView.com
READ THE FINE PRINT WHEN BUYING A TESLA WITH BTC
Found in the fine print when purchasing a vehicle with BTC, there’s a catch-22 explaining that Tesla, at its sole discretion, can choose how it refunds a buyer – either through BTC or USD.
In plain terms, if the price per BTC is significantly higher than when the buyer spent their coins, Tesla can refund the vehicle purchase in USD instead.
The Refunds and Buybacks section of the Tesla fine print reveals unexpected risk for buyers | Source: Twitter
According to Wikipedia, “one connotation of the term is that the creators of the catch-22 situation have created arbitrary rules in order to justify and conceal their own abuse of power.”
Tesla, as the corporation in the power position while making this business transaction in BTC, makes the risk associated with Bitcoin’s notorious volatility as a burden only the buyer bears.
It makes sense from a business standpoint, but doesn’t exactly align well with the transparency and lack of third-party control the cryptocurrency space is used to. However, as more controlling corporations get involved in the cryptocurrency, the more they’ll seek to control the conditions surrounding it, which might not be so great for Bitcoin as it was meant to be.
Second US Bitcoin ETF captures $10 million in 5 minutes
It took the US Securities and Exchange Commission, the SEC, nearly 10 years to approve the country’s first Bitcoin ETF.
Since 2013, companies in the cryptoactive industry have been polling the SEC for approval of an investment product like the ETF to target big US investors.
However, once the SEC approved ProShares’ first Bitcoin ETF (BITO) it soon surpassed $1 billion. And five days later, his shares are almost all purchased.
The same happened with the second ETF approved by the SEC, the Valkyrie Funds (BTF). The fund was launched on Nasdaq this Friday (22).
The fund’s success also repeated BITO and traded $10 million in just the first 5 minutes. The ETF exclusively backs the value of the Chicago Mercantile Exchange (CME) BTC futures market.
“You have to be happy with the results of the BTF, although it’s difficult for him to keep up with BITO,” said Bloomberg analyst Eric Balchunas.
The analyst was referring to the fact that the ProShares product has an advantage due to its launch being the first in the US. In this way, the fund attracted the full attention of the market.
Balchunas believes the BTF has a lot of work to do. But, according to him, there are still chances for him to conquer the market, although BITO is the darling at the moment.
Since its launch, Bitcoin BITO has performed remarkably. Balchunas commented that if he maintains the entry fee, there will be no more futures to buy at the end of the month.
In addition, he pointed out that this first ETF is moving towards breaking the limit on the number of contracts allowed by the CME.
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Bitcoin Bullish Prediction Is Released By PlanB
There are all kinds of bullish predictions about the price of Bitcoin these days.
At the moment of writing this article, BTC is trading in the red and the king coin is priced just a little above $60k.
One of the bullish predictions has been revealed by analyst PlanB.
Bitcoin to go parabolic
He is expecting Bitcoin (BTC) to go on a major parabolic run over the next few months.
Just to refresh your memory, PlanB is the creator of the Bitcoin stock-to-flow (S2F) model – this attempts to predict the price of the king coin by measuring the amount of new supply that enters the market each year. This is compared to the amount of supply already in existence.
During a new interview, he addressed his S2F floor model as a reliable indicator which allowed him to nail BTC’s monthly closing prices in August and September.
“The model that got the most attention the last couple of months was the floor model because I predicted on June 20th – that was the same time, by the way, that the Guggenheim chief officer predicted Bitcoin to go below $20,000 – at about that same day, I made the prediction: ‘No, no, no it’s going to $47,000.’”
He continued and said the following:
“And Bitcoin was below $34,000 at that time. I said, ‘Well, in August, it will close above $47,000. In September, it goes down a little but it will close above $43,000, and in October it will close above $63,000.’”
He also said that if BTC is to continue following the floor price predictions of his S2F model, then it could surge over 44% from its current price of around $60,000 in November. The king coin could stage another major rally in December.
“If that continues, and frankly I would be very surprised if it doesn’t, that would be a black swan event that we haven’t seen in the last ten years.”
He also said:
“But if that continues, we’ll go to $98,000 in November already and $135,000 Bitcoin in December, so that will be a really nice Christmas this year if that comes true.”
200 Bitcoin ATMs are installed in Walmart stores, according to a report
It is now possible for customers of Walmart stores to withdraw Bitcoins at ATMs installed in their US stores.
The American retail multinational will allow its customers to buy bitcoin using ATMs installed in some of its stores in the United States. The initiative was made possible after a collaboration between retail giant Coinstar and Coinme.
Walmart will actually install Bitcoin ATMs
Last month, Walmart’s name became involved in a story, according to which the company had partnered with Litecoin (LTC) to allow its customers to make payments with the cryptocurrency. Although the rumors caused great excitement throughout the market, as soon as the facts were revealed he corrected them.
Now, however, a more credible Bloomberg report says the company has joined forces with Coinstar – known for its machines that can exchange physical currency for digital money.
The result of this new partnership was the installation of 200 Bitcoin ATMs in Walmart stores. It is now possible for customers to buy and withdraw Bitcoins at ATMs installed in some US stores.
Sam Doctor – director of strategy at cryptocurrency broker BitOoda – said installing bitcoin ATMs in supermarkets is a growing trend in the United States. However, he noted that Walmart is different from its rivals in that its customer niche can reach a more sizable percentage of society:
“Walmart expands access to Bitcoin to more people, as long as it continues to provide legitimacy among the most skeptical”
The Coinstar deal was previously reported by Coindesk, which tested the service. Customers who buy Bitcoin will need to insert paper bills into the machine to receive a voucher.
They must also set up a Coinme account and undergo a background check before the voucher can be redeemed. The machines charge a 4% fee for the Bitcoin option and a 7% cash exchange rate.
“It’s an expensive way to buy Bitcoin, but it lowers the barriers to entry for first-time cryptocurrency buyers,” concluded Sam Doctor.
Number of Bitcoin ATMs Grows Worldwide
This is not just a trend in the US. The number of Bitcoin ATMs is growing worldwide.
According to Coin ATM Radar data, they had only 7,756 in May 2020, and we’ve jumped to 29,852 now in October 2021.
What likely influenced the increase in demand for Bitcoin ATMs (ATMs) between 2020 and 2021 was the growing popularity of digital payments.
A report by Global Trade Magazine suggests that digital payments increased in popularity during the COVID-19 pandemic, with retailers reporting a 69% increase in usage since January, and this likely weighed on the increased demand for bitcoin worldwide.
A month ago, for example, Bitcoin became the official currency of El Salvador and the government launched its own BTC wallet, but, especially because of identity theft, adoption is not going as well as you think.
When there was a distribution of US$ 30 in bitcoin for each citizen in the country, criminals went after other people’s bonuses, similar to what happened in Brazil with the coronavoucher.
Other problems were also reported by two Brazilians who were in the country.
“For example, one of the things that happened is that they announced that the 200 ATMs were going to be [fruto de] a public-private partnership, but in the end, I don’t know if there was any problem in the bidding or any commercial problem in this project, [mas] it ended up being done with public resources”, they told Cointimes.