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