2 reasons why buying a Tesla with bitcoin is a bad idea

2 reasons why buying a Tesla with bitcoin is a bad idea

Tesla is now accepting bitcoin as a form of payment for its vehicles, making it one of the first companies to accept the cryptocurrency as a form of payment for its products.

The move came two months after Tesla purchased $1.5 billion of bitcoin, as CEO Elon Musk continues to lend his support to the cryptocurrency. Musk said that any bitcoin received by the company as a form of payment won't be converted into fiat currency, signaling that Musk is bullish on the long-term potential of the cryptocurrency.

But Tesla's decision to accept bitcoin as a form of payment for its vehicles could be a bad deal for consumers that decide to follow through with the offer for two key reasons.

First, consumers that purchase a Tesla with bitcoin will face tax consequences, especially if they are sitting on large unrealized gains, as sending bitcoin is a taxable event akin to selling a stock.

Cathie Wood of Ark Invest suggests bitcoin investors that are sitting on large unrealized gains not sell or transact in the cryptocurrency until potential tax changes by the IRS are implemented. If the IRS were to reclassify bitcoin as a currency rather than property, the tax burden could be significantly