Tesla Is Facing Criticism after Buying Bitcoin — Why?
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Tesla Is Facing Criticism after Buying Bitcoin — Why?

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Not everyone is impressed by the electric vehicle maker’s new investment strategy.

Tesla Is Facing Criticism after Buying Bitcoin — Why?

Содержание

Tesla’s dramatic Bitcoin buy-in might have lit a fire under the crypto markets, but not everyone is impressed by the electric vehicle maker’s new investment strategy.

A former Goldman Sachs executive who has been in a long position on TSLA since 2019 announced on Twitter that he’s taken his money off the table. On Twitter, Gary Black wrote:

“The absence of clear FY’21 delivery guidance, increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors.”

Black argued that Tesla was already high risk before it decided to gain a substantial amount of exposure to Bitcoin — and suggested this new strategy had tipped him over the edge.

Other critics have warned that TSLA’s decision to back Bitcoin goes in the face of its environmental credentials, not least because of how energy intensive this cryptocurrency is. The latest figures from Digiconomist suggest that a single BTC transaction has a carbon footprint that’s the equivalent of 690,187 Visa transactions — and consumes the same amount of electricity as an average U.S. household would use in 23 days.
The New Republic also pointed out that Tesla sold $1.58 billion of carbon credits in 2020, and this cash could have helped contribute to the big crypto purchase. Describing BTC as “the digital equivalent of burning coal,” journalist Jacob Silverman added:
“There are few speculative assets more to the climate than Bitcoin, which consumes a colossal amount of electricity.”

Others fear that Tesla’s share price could end up tumbling if BTC suffers a crash.

The company’s crypto announcement was made before trading began on the New York Stock Exchange on Monday, and TSLA’s stock was largely flat, closing down 0.6%.

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