Tesla sells $272 million of BTC, but Elon Musk is still HODLing
2 min readAmerican electric vehicle and clean energy company Tesla has sold nearly $275 million worth of BTC months after a landmark $1.5 billion investment, it revealed in a filing yesterday.
The sale meant Tesla cut its position by 10%, adding over $101 million to its revenues in total.
Tesla has made more profit by selling BTC than in 14 years of selling cars.
— Documenting BTC
(@DocumentingBTC) April 26, 2021
(@DocumentingBTC) Tesla profits boosted
Tesla attributed a chunk of profits to its BTC sales, coupled with those of its electric vehicles. As per UK news network BBC, Tesla’s profits for the first three months of the year were $438 million, a huge jump from the reported $16 million last year.
“It is our intent to hold what we have long term and continue to accumulate BTC from transactions from our customers as they purchase vehicles,” the company’s chief financial officer, Zachary Kirkhorn, told investors.
Tesla announced last month it would allow buyers to buy its vehicles using BTC—with all proceeds stored in BTC rather than being converted to cash.
However, not everyone was upbeat about Tesla’s BTC position. Nicholas Hyett, an equity analyst at stockbroker Hargreaves Lansdown, said that despite the generally positive results, there could be problems ahead.
“Tesla has made some $101 million on its investment so far, which is all well and good, but huge gains and losses aren’t really what corporate treasuries are all about,” he said, adding that the firm has gained skeptics:
“Investors could well argue that if they wanted to have exposure to BTC they would have bought some themselves and don’t need Tesla to do it for them.”
Musk says he hasn’t sold any BTC
Meanwhile, some in investing circles Tesla CEO Elon Musk had used his influential position to pump the prices of BTC and sell at a profit. “Elon Musk buys BTC. Then he pumps it. It goes up. Then he dumps it and makes a fortune,” tweeted Dave Portnoy, the founder of popular sports blog Barstool Sports.
It was a comment to which Musk himself responded, “No, you do not. I have not sold any of my BTC.”
Musk noted that Tesla sold 10% of its holdings to “prove the liquidity” of the BTC in terms of holding the asset on the books instead of cash.
No, you do not. I have not sold any of my BTC. Tesla sold 10% of its holdings essentially to prove liquidity of BTC as an alternative to holding cash on balance sheet.
— Elon Musk (@elonmusk) April 26, 2021
But some liquidity it is. BTC fell from $64,000 to under $50,000 in the past. And while Tesla may or may not have sold in the same period, the drop proved BTC remains a notoriously volatile asset to hold on one’s books.
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