Tesla made a $272 million profit from the sale of some of its bitcoin holdings in the first quarter. Tesla CFO Zach Kirkhorn said on a Monday earnings call that the transaction reduced the company’s Bitcoin holdings by 10%.
Tesla listed the selling of bitcoin in the slide deck following the company’s first-quarter earnings reports on Monday. Tesla invested in bitcoin, according to Kirkhorn, to gain a return on its surplus cash in a low-interest rate setting.
Selling Bitcoin to Provide Liquidity
Despite the fact that the firm is still dealing with global supply chain issues such as semiconductor shortages and ship port availability, he believes the bitcoin industry is a liquid market with a bright future.
According to Kirkhorn, Telsa will begin to collect bitcoin by consumer purchases and will make bitcoin-related announcements in the future.
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
Elon Musk has openly stated his support for Bitcoin in recent times. “I am a Bitcoin fan. I’m late but a supporter at the party. I assume bitcoin is on the brink of being universally embraced by traditional people in finance. “I think Bitcoin is a good thing at this point,” Musk said on the Clubhouse live stream.
Many global central bankers and regulators have recently warned that Bitcoin is mostly used for criminal and money laundering purposes, and Musk’s comments set him at odds with them.
People have liked to associate Musk with Bitcoin in the past, Musk said, dating back to 2013, when the cryptocurrency was worth a fraction of what it is today, trading for less than $100.
Bitcoin’s Run this Past Year
Over the past year, the price of bitcoin has more than quadrupled. At the start of 2021, it reached a fresh all-time peak of about $42,000. On the heels of the Tesla headlines, it hit a record of $60,000. Increased financial interest and the belief that it is a gold-like safe-haven asset have boosted the digital currency, according to bullish analysts.
Tesla has stated that in exchange for its goods, it would begin accepting bitcoin payments “subject to relevant laws and initially on a limited basis.” Tesla would be the first major automaker to do so.
Musk also added the hashtag #bitcoin to his Twitter profile, helping to boost the cryptocurrency’s price by as much as 20% for a brief period. “I think Bitcoin is a positive thing at this point, and I’m a Bitcoin supporter,” he said two days later on the Clubhouse social network chat forum.