PanamaTimes

Tuesday, Oct 27, 2026

Why Tesla's decision to accept bitcoin as payment is unlikely to be followed by other companies

Why Tesla's decision to accept bitcoin as payment is unlikely to be followed by other companies

Some crypto experts say the move is an unstable choice for Tesla and could deter other companies from following.

Elon Musk announced this week Tesla has begun to accept bitcoin as payment for all models of its cars in the US.

From a transactional perspective, the billionaire's crypto-related announcements have been game-changing for bitcoin. That is quite evident from statistics showing crypto-related keyword searches on Google such as "invest in bitcoin" and "how to trade crypto" have seen more than a 1,015% jump in search volume since January alone, according to data from Semrush.

But some crypto experts say this is an unstable choice for Tesla and could deter other companies from following. Here are four main factors that make the cryptocurrency an impractical and costly method of payment for corporates.

Volatility


With a market cap that now exceeds $1 trillion, bitcoin has quickly acquired a status of being a digital global store of value and reserve asset. But hourly price fluctuations make it extremely volatile, impractical, and a costly payment method for corporates, according to Megan Kaspar, co-founder of crypto investment firm Magnetic. That makes the currency a "poor medium of exchange" and a risky method of payment. Sudden price fluctuations could negatively impact a customer's ability to pay in bitcoin, she said.

A fintech expert said Musk's decision is more like an experiment that will measure potential revenue and client type for his products. This step should be assumed to be one of the automaker's tests for its payment mechanisms, he said.

"Elon Musk is asking people to buy a depreciating asset (a car) with an appreciating, albeit volatile, asset," Luke Sully, CEO at treasury fintech specialist Ledgermatic, said. "The underlying price volatility is the most immediate risk for merchants."

It comes down to how comfortable companies are in accepting a currency that has so much volatility in a single day, Anthony Denier, CEO of Webull, said. "You may see a few companies making the leap, but most companies are fiscally conservative and are not going to jump on a trend like this too quickly," he said.

High transaction fees


To ensure transactions go through on crypto networks, a customer is usually charged a "mining", or "network" fee. Now, regardless of the dollar amount transacted, whether carrying a value of $5 or $100, this mining fee is standard for every transaction. The fee varies depending on network demand and currently averages around $20. This element of the payment makes the bitcoin blockchain's fees unsustainable as a form of payment, according to Kaspar.

The taxman treats bitcoin as property, not currency


The Internal Revenue Service adds another layer of complication for merchants that are taxpayers in the US, because it considers bitcoin to be property, not currency, Eric Christensen, chief payment officer of e-commerce firm Digital River, said. "That means when you accept bitcoin, you register the value of it on the transaction date as the basis of that property. When you sell it, you might see a gain or a loss, all of which must be reported to the IRS."

Digital wallet regulation is a grey area


A key challenge at this point is there are only a handful of banks globally that are willing to provide stored digital facilities for the merchants they work with, according to Felix Shipkevich, founder of law-firm Shipkevich PLLC. "Regulation of digital wallets is very grey at this point," he said, adding not many jurisdictions regulate digital wallet usage between merchants and their consumers.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×