The Bitcoin (CRYPTO: BTC) price is up 3.5% over the past 24 hours. One Bitcoin is currently worth US$58,279 (AU$75,687).
Bitcoin is now less than 6% off its record highs reached on 14 February this year, according to data from CoinDesk.
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Should you take Elon Musk up on his Bitcoin offer?
In March, Tesla Inc (NASDAQ: TSLA) founder Elon Musk made global news (again) when he announced the company would accept Bitcoin in payment for its electric vehicles. Commencing in the United States, that offer is expected to go global later in 2021.
At the current Bitcoin price, you'll need just under 2 Bitcoin to purchase a base Tesla Model S Down Under.
But should you?
For that answer, we turn to Mena Theodorou, co-founder of the digital currency trading platform Coinstash.
He told the Motley Fool, "More investors are starting to realise that there is real potential for crypto assets adoption as both a store of value as well as functional currencies among retail customers."
Theodorou continued:
As we move into a true digital revolution, it [buying a Tesla with Bitcoin] actually makes sense. I would recommend starting to get used to the idea of digital currencies as the future of money. It's only a matter of time until people start to realise how easy and convenient it is to assign utility to crypto assets in their day-to-day lives.
An intelligent investor could even get a loan for a Tesla in a cryptocurrency and pay the instalments with the interest they earn on crypto assets sitting in their crypto wallet as the interest rate on these products are generally relatively high since they're not regulated by a central bank.
Earning interest on crypto currencies
If you're not familiar with the concept of earning interest on your stored Bitcoin or other cryptocurrencies, you're not alone.
But digital tokens don't need to sit idly in your digital wallet.
According to Theodorou:
At Coinstash, we are working on tools that will allow bitcoin holders to put their "stored" crypto assets back to work by earning interest or serving as collateral for loans. This is why assets like stablecoins and altcoins have a lot of potential to function as alternative currencies to Bitcoin.
Where to next for the Bitcoin price?
With Bitcoin up more than 100% in 2021 and Ether – the world's second largest crypto by market cap – up 182%, we asked Theodorou what's been driving the big resurgence in the dominant cryptos. He said:
Most economists and anyone with a basic understanding of supply and demand would agree that printing money to cover national debt is a short-term solution that can lead to catastrophic market devaluation. The fact that most crypto assets are not tethered to fiat currencies (like the US dollar or Australian dollar) is perhaps one of the key reasons that crypto assets have taken off so well amongst the masses, especially over the past few months.
So where to next for the Bitcoin price?
According to Theodorou, "This is the million-dollar question. In the long term, I believe bitcoin has the potential to hit US$100,000."
