Tesla shopping with bitcoin represents ‘major step’ for crypto, analyst says

Tesla Inc. Chief Executive Elon Musk’s announcement that people will be able to buy Tesla vehicles with bitcoin was a “major” early step for the crypto world, analyst Dan Ives said in a note Wednesday. “We were not expecting this to go live until the second half of this year,” he said. “This is a seminal moment for Tesla and for the crypto world with Musk now cutting the red ribbon on bitcoin transactions within he broader Tesla ecosystem.” Ives said he expects less than 5% of transactions to be through bitcoin over the next 12 to 18 months, but that, he said, could move higher over time “as crypto acceptance starts to ramp over the coming years.” Tesla earlier this year announced a $1.5 billion investment in the cryptocurrency, and the news also “formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto from a transactional perspective,” Ives said. The analyst kept his neutral rating on Tesla shares. The stock has gained 556% in the past 12 months, compared with a gain of 61% for the S&P 500 index .

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.