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Market Musings

You Can Now Buy a Tesla with Bitcoin — But Was Timing of Elon Musk's Announcement Suspicious?

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Published on:
March 24, 2021

Did Elon Musk coincide his announcement with the imminent expiry of Bitcoin options worth $6 billion?

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Elon Musk has set the crypto markets alight once again with a short and simple tweet: “You can now buy a Tesla with Bitcoin.”

 

Early on Wednesday morning, Tesla’s CEO and “Technoking” said the electric vehicle manufacturer is operating Bitcoin nodes directly — and any crypto that it receives through sales will not be converted into fiat, meaning its exposure to BTC will increase over time.

 

Although the feature is only available in the U.S. to begin with, Musk expressed hope that crypto will be accepted in international markets later this year.

 

The announcement did help drag Bitcoin out of the doldrums. The world’s biggest cryptocurrency was trading at about $54,000 before the announcement — but accelerated to highs of $57,262.38 a few hours later.

 

Such a move had been expected. Back in February, when Tesla declared to the SEC that it had bought $1.5 billion in Bitcoin to hold in reserve, the company had said:

“We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

Suspicious Timing? 

The news comes ahead of a record number of BTC options expiring at the end of this week.

 

Historically, the price of Bitcoin is pushed down when options expire — and this is good news for bears. But if BTC’s value suddenly rises, many bears would be forced to liquidate, and could suffer rather nasty financial losses.

 

Data from BYBT suggests $6 billion worth of options are due to expire on Friday. Elon Musk has stated his dislike for short sellers in the past, making some cynics argue that the timing of his tweet was very calculated.  

 

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