Buying cars with Bitcoin

After a few months of uncertainty, attacks on Exchanges and a constant drop in the price of Bitcoin due to FUD (fear, lack of confidence, we already talked about this term in this post), it seems like we’re finally seeing a recovery in Bitcoin’s price. And, although you’d think we should be happy that Bitcoin’s price is going up, it’s directly tied to the price of altcoins: if BTC goes down, everything goes down because people sell at stop-loss and wait to buy back in when the price bottoms out… and if BTC goes up, everything goes down because people sell their altcoins to hold only BTC, since it’s the one rising the most. As my friend César would say, it’s a total madhouse.

And right in the middle of this price surge, when we’re all thinking we’re going to get rich and starting to imagine what we could spend all the cash we’re about to make on Bitcoin, a BMW dealer in southern England shows up and announces that from now on you can buy a BMW with cryptocurrency.

This isn’t the first time a car sales site has announced it accepts cryptocurrency—we’ve had others for a while now, like https://www.classic-recreations.com/ (which accepts a good bunch of cryptocurrencies: Bitcoin, Litecoin, Bitcoin Cash and Ethereum among others) and my favorite, https://www.moonassets.io/supercars. I drop by this one every now and then just to imagine myself buying a supercar and paying for it in Bitcoin:

Jason Engel, the owner of Classic Recreations, said that it’s only a matter of time before cryptocurrencies become integrated into society and turn into a standard means of payment, so they simply wanted to get ahead of the curve and be ready for it.

Statistically, purchases made with Bitcoin tend to be linked to luxury goods bought directly in Bitcoin so as not to lose money on fees during the buying/selling process, so it’s not far-fetched to think of buying a supercar, jewelry, or even real estate, as was already announced on the well-known site Idealista.com. So nowadays it’s actually possible to find a fancy luxury mansion and pay for it exclusively in Bitcoin (declaring it to the tax office, obviously).

But what happens to the price when Bitcoin’s value changes? Well, more or less the same thing that happened when our parents bought a house 40 years ago (that’s about the average age of my 7 subscribers), which cost them around 1 million pesetas (€6,000) and nowadays sells for way more… the problem is that Bitcoin is still in its early fluctuation phase, so if someone bought one of those fancy mansions back in December 2017 for the price of 60 Bitcoin (60 x $20,000 = $1,200,000), today it would be worth less than half (480,000 dollars, since Bitcoin is sitting at around $8,000 as I write this post). Does that mean the property has lost value? No, an appraiser would still value it at $1,200,000 (150 BTC today), so the owner could sell it again and stash those 150 BTC under the mattress, waiting for the price to climb back up. Just remember that one of the first transactions ever made in Bitcoin was buying a couple of pizzas for 10,000 BTC at the price back then… more than 80 million dollars at today’s price, which makes them the most expensive pizzas in history (yes, even more than Telepizza’s).