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UPDATE 1-Buy a car with bitcoin? Some car dealers were years ahead of Musk

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Hyunjoo Jin
·3 min read
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* Small number of dealers sell cars, from Kia toLamborghini, withbitcoin

* Dealers say bitcoin payments are niche market, but seegrowingadoption

* Price volatility is one of the risks –dealers(Adds Lamborghini spokeswoman comments)

By Hyunjoo Jin

SAN FRANCISCO, Feb 9 (Reuters) - Georgia car dealerChristopher Basha was way ahead of Elon Musk in embracingbitcoin as a currency for selling vehicles.

Basha said he learned about cryptocurrency from a roommatewho mined bitcoin. “Someone bought a pizza with bitcoin," hesaid. "Buying a car with bitcoin didn't seem that crazy.”

He began accepting bitcoin payments in 2015, but nocustomers were interested. "I almost forgot about it," he said.

In 2017, bitcoin prices surged, and one customer used thecryptocurrency to buy four Kias for a total of more than$150,000, Basha said. Bitcoin payments have been picking upsince late last year, with prices rallying.

Basha is one of a small group of auto dealers who have beenaccepting bitcoin and other cryptocurrencies from customers wellahead of Tesla Inc's revelation that it had bought $1.5 billionof the cryptocurrency and would soon accept it as a form ofpayment for cars.

Dealers said accepting cryptocurrency is a good marketingand branding tool. But it is still a niche business. Pricevolatility and the absence of trusted banks and other financialintermediaries make bitcoin payments a risk for dealers who arenot tech savvy.

Basha, the Kia dealer, said he converts bitcoin into cashimmediately upon receipt because he believes it risky for acompany the size of his to hold such a volatile asset. But itdoes take several minutes to turn bitcoin into U.S. dollars on apayment platform, which occasionally leads to losses averaging$300 to $400 on each transaction due to price movements.

Once, he forgot his password to send bitcoin from oneaccount to another to make the dollar conversion after receivingpayments from a customer. "I was freaked out… There is nomiddleman who’s going to come save you."

Pietro Frigerio, a Lamborghini dealer in Irvine, California,said when bitcoin prices surged in 2017, his store sold 20 carsin a month. But during the latest rally, he has not seen muchincrease in bitcoin payments.

“People are waiting for exchange rates to go up further,"said Frigerio, who also sells other premium luxury sports carslike Bugatti and McLaren.

He said customers who bought cars with bitcoin havesomething in common: they are young people who have a strongbelief in virtual currency.

"More and more, Bitcoin is becoming a common payment form,"Lamborghini said in a statement to Reuters, adding that itsdealers are free to decide payment methods.

Peter Saddington, founder of cryptocurrency startup Emrit,bought a Lamborghini Huracan in 2017 using bitcoin that hebought in 2011 for $115 in a bid to bring attention to hiscompany and cryptocurrency.

"(Tesla's move) is certainty a PR stunt," he told Reuters."But Elon is very progressive in his thinking, so it makes senseto me that he would offer a future currency for his company."(Reporting by Hyunjoo Jin, Additional reporting by Anna Irrerain NEW WORK; Editing by Joe White and Dan Grebler)