Tesla made more than $100 million from the sale of bitcoins in its record quarter
Tesla has taken advantage of the ‘bull’ of Bitcoin, which has reached over $60,000, and has made a profit of more than $100 million after selling part of the investment of $1.5 billion it made in February. Specifically, as confirmed by its financial director, Zachary Kirkhorn, the electric vehicles company got rid of 10% of their holdings and made $272 million dollars, with a “net income” of $101 million. This profitable operation took place in the best quarter of the company, in which they obtained a net profit of $413 million.
Despite this sale, the company led by Elon Musk had $1.33 billion in digital assets until March 31. However, the operation has drawn criticism on the company, and Musk was accused of speculating with cryptocurrencies. Kirkhorn defended that they believe “in the long term value of bitcoin” and added that their intention is “to keep what we have in the long term and continue to accumulate bitcoins from our customers’ transactions as they buy vehicles.”
The CEO of the company, has defended that the sale has occurred “essentially to demonstrate the liquidity of bitcoin as an alternative to keeping cash on the balance sheet.” Musk has disassociated himself from the sale of his company’s bitcoin and assured through his Twitter that he has not sold any of his bitcoins. A user of the social network accused him of inflating the price of bitcoin to make a fortune, something he denied.
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
— Elon Musk (@elonmusk) April 26, 2021
Musk’s support for cryptocurrencies has been one of the most prominent thus far, boosting its price at key moments.
Bitcoin has not been the only currency that the founder of Tesla supports, there is another one: the Dogecoin. The meme coin, which Musk has come to classify as his favorite, was born as a parody of Litecoin, however it already overcame it in value after a meteoric rise. Its capitalization, which amounts to $37 billion , has recently allowed it to sneak into the ‘top 10’ of the highest-valued cryptocurrencies and is ranked seventh.
This bet had its repercussion in Tesla that decided to invest $1.5 billion of its treasury in bitcoin. This investment was an unprecedented move by a large business corporation. It allocated almost 8% of its treasury to the most used cryptocurrency instead of other more common risk-free financial assets such as fixed income or deposits.