Tesla Inc. (NASDAQ: TSLA) purchased its first Bitcoin holding in early 2021 worth approximately $1.5 billion. During the same period, the company announced that it would begin accepting Bitcoin for electric vehicle purchases. The announcement increased crypto enthusiasm and contributed to Bitcoin’s first upsurge beyond $50k.
However, the thrill was short-lived as regulators complained about Bitcoin’s high energy consumption in its Proof-of-Work (PoW).
As a result, Tesla canceled its use of Bitcoin as a form of payment for electric vehicle purchases. Notably, Tesla indicated that it would revisit Bitcoin as a form of payment after miners transition to more sustainable energy sources.
Tesla and Bitcoin Market
Ever since the company purchased Bitcoin in 2021, it has been a long-term holder, but constantly readjusted its holdings. According to the latest Tesla quarterly financial report, the company held Bitcoins worth $1.261 billion during the first quarter of 2022. However, the company’s holdings significantly dropped to approximately $218 million during the second quarter.
The decline in Tesla’s Bitcoin holding during last year’s second quarter coincided with the 2022 crypto crash fueled by the Terra Luna UST crash. The company held its Bitcoin bag through the third quarter of 2022 unchanged. However, during the fourth quarter financial results, Tesla announced its Bitcoin holdings at about $184 million.
Again, the company’s selloff coincided with the crypto crash fueled by the FTX and Alameda Research implosion that wiped out over $30 billion from the industry.
And now, during the first quarter of 2023, the company has announced that its Bitcoin holding remains unchanged at approximately $184 million. Notably, the current accounting rules do not allow Bitcoin gains to be booked. Moreover, Bitcoin price gained more than 70 percent during the first quarter.
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Elena R
Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing – accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.
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Tesla, the electric car company founded by entrepreneur Elon Musk, has not changed its reported holdings of Bitcoin in the past two consecutive quarters, which have remained at $184 million.
Tesla has been a popular proponent of cryptocurrencies and blockchain technology, and has adopted several new technologies to give its customers a more secure and user-friendly experience. It was disclosed in February that Tesla had purchased $1.5 billion worth of Bitcoin and would accept the cryptocurrency as payment for its cars, becoming the first major automaker to do so.
Since then, the company has held on to its Bitcoin holdings, making it clear that it is still bullish on the cryptocurrency. This is even more evident when compared to rival carmaker Ford, which has not announced any investment or interest in cryptocurrency or blockchain technology.
The choice of Tesla to hold onto its Bitcoin is likely a strategic one; depending on how regulations around the cryptocurrency develop, Tesla may be in a position to maximize its profit from Bitcoin if its value increases as many predict.
Tesla’s continued embrace of cryptocurrencies and blockchain technology could be of inspiration and influence to other companies. If Tesla manages to succeed with its Bitcoin gamble, it could be the impetus needed to kick-start cryptocurrency adoption on a much larger scale.
At the same time, however, the move is indicative of Tesla’s faith in the future of cryptocurrency. Its decision to hold onto its Bitcoin comes at a time when the cryptocurrency market is experiencing significant volatility and uncertainty, so it’s clear that the company is willing to stick with the cryptocurrency in the long-term, regardless of current conditions.
All in all, Tesla’s decision to hold onto its Bitcoin for two consecutive quarters shows that the company is confident in the future of the cryptocurrency, and that its leadership believes in the potential of blockchain technology. This decision could be the spark that other businesses need to start investing in the cryptocurrency, further driving its mainstream acceptance.
