Tesla Has Made $100M on Bitcoin Already — But Elon Musk is Being Criticized
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Tesla Has Made $100M on Bitcoin Already — But Elon Musk is Being Criticized

Some on Crypto Twitter aren't impressed with Tesla's decision to sell 10% of its Bitcoin.

Tesla Has Made $100M on Bitcoin Already — But Elon Musk is Being Criticized

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Elon Musk’s Tesla made more than $100 million by investing in Bitcoin earlier this year.
In its Q1 2021 earnings call on April 26, the electric car maker said that in March it sold off $272 million worth of the $1.5 billion in Bitcoin it bought earlier this year.

Tesla’s chief financial officer, Zachary Kirkhorn, said the sale “trimmed our position by 10%” — putting the value of its pre-sale Bitcoin holdings at $2.72 billion at the time. That means it sold the Bitcoin it bought for $150 million at an 80% profit. 

The electric vehicle manufacturer bought its Bitcoin this year, and announced it on Feb. 8, when Bitcoin had climbed from about $29,000 to $43,000. The sale came in March, when Bitcoin topped out just below $60,000.

That said, Kirkhorn didn’t emphasize the on-paper returns of its Bitcoin investment — which was heavily criticized — focusing much more on its liquidity.

Providing context to the company’s “Bitcoin story,” Kirkhorn said: 

“Elon and I were looking for a place to store cash that wasn't being immediately used, trying to get some level of return on this, but also preserve liquidity … Bitcoin seemed at the time and so far has proven to be a good decision.”

Kirkhorn explained that due to various market conditions, the ability to access cash quickly “is super-important to us right now,” noting that the company was able to buy and sell Bitcoin “very quickly” — adding: 

“From a corporate treasury perspective, we've been quite pleased with how much liquidity there is in the Bitcoin market … One of the key points that I want to make about our experiences in the digital currency space is that there's a lot of reasons to be optimistic here.” 

Elon Denies Pump-and-Dump Accusation

Musk himself doubled down on the liquidity argument in a subsequent Twitter kerfluffle after being accused by Dave Portnoy of a pump-and-dump scheme, who wrote:

“So am I understanding this correctly? @elonmusk buys #bitcoin. Then he pumps it. It goes up. Then he dumps it and make a fortune.”

Musk shot back: 

“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.”