Bitcoin

Tesla Sold 10% of its Bitcoin to Prove the Crypto Offers Liquid Alternative to Holding Cash on Balance Sheet

Tesla Sold 10% of its Bitcoin to Prove the Crypto Offers Liquid Alternative to Holding Cash on Balance Sheet

Tesla announced that it sold 10% of its Bitcoin investment during Q1 2021 and raised $272 million from the sale. Elon Musk explained that this was done in order to prove Bitcoin liquidity as an alternative to holding cash on a balance sheet.

Tesla stated in its Q1 2021 Earnings Report that it sold part of its Bitcoin investment during Q1 and raised $272 million from the sale. CFO Zachary Kirkhorn clarified that the sale accounted for only 10% of the total holdings. He explained that Tesla was looking for a place to store its cash, and Bitcoin presented itself as a good solution for such an effort while allowing some profit from it. “Bitcoin was a good place to put Tesla cash and be able to get some return on it,” Kirkhorn said. “We've been pleased with how much liquidity there is in the Bitcoin market. We do we believe long-term in the value of Bitcoin,” he added.

Tesla's sale of Bitcoin was a way to "prove liquidity of Bitcoin as an alternative to holding cash on balance sheet," Musk explained later on Twitter. He also wrote that he did not sell his personal holdings in Bitcoin, which may reflect his real commitment to Bitcoin despite its high value.

On February 8, from the 8-K form filed with the SEC, it became known that Tesla has acquired $1.5 billion in Bitcoin cryptocurrency. The company also promised to start "accepting bitcoin as a form of payment for our products in the near future." At the end of March, the company announced that its customers can now pay for a car purchase with Bitcoin. The purchase and holding of cryptocurrency by Tesla is an updated investment policy to give the company more flexibility to further diversify and increase the return on its cash.

© 2021, Eva Fox. All rights reserved.

_____________________________

We appreciate your readership! Please share your thoughts in the comment section below.

Article edited by @SmokeyShorts, you can follow him on Twitter


About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

Follow me on X

Reading next

Tesla & Samsung Are Expanding Their Collaborative Relationship to LEDs for Smart Headlamps
Tesla Is an AI Robotics Company that Provides Up-to-Date Solutions to Existing Problems

Tesla Accessories