Tesla and the love and hate story with Bitcoin

In February 2021 Elon Musk announces his first entry into the crypto world after purchasing a total of 43,200 Bitcoin with Tesla.

The value of Tesla’s crypto holdings has now exceeded 1 billion dollars, following the recent bullish price action recorded by Bitcoin.

In February 2021, Tesla had purchased Bitcoin for 1.5 billion dollars, but later sold a part of it. The company is now in profit by about 495 million dollars.

Back in February 2021 Elon Musk announces his first entry into the crypto world after purchasing a total of 43,200 Bitcoin with Tesla.

The investment by the car manufacturer, amounting to 1.5 billion dollars according to the quotations of the time, was intended to maximize the returns of the company’s liquid cash.

In parallel, Tesla would have started accepting payments in Bitcoin for the purchase of electric vehicles, supporting a phase of public acceptance of the cryptocurrency.

The news fueled part of the bull run of 2021, bringing Bitcoin above 60,000 dollars in the first quarter.

A few months later, however, Elon Musk decided to backtrack on his previous decision to liberalize bull and bear trading in crypto.

With a totally unexpected news, in May Tesla announced the sale of 10% of its holdings in Bitcoin, halting support for the digital asset.

The reason for this choice reflects the way in which Bitcoin mining was powered at the time, with a large amount of CO2 emissions harmful to the environment.

In 2022, Tesla continued to progressively sell its Bitcoin holdings, liquidating approximately 400 million dollars in total.

In the second quarter, it liquidated 75% of the reserves at a loss when the price of the crypto was 24,000 dollars, obtaining 218 million dollars.

In the fourth quarter, it further lightened the load by selling at a price of 21,000 dollars, for a total of 218 million dollars.

From that moment on, Tesla has not executed any more operations in Bitcoin, leaving its holdings at a total of 11,500 coin.

The latest news talks about Tesla’s Bitcoin balance, which after the latest bull rise in cryptocurrency prices has risen to 1 billion dollars.

At the end of 2022, when the value of the currency was just 17,000 dollars, the company’s crypto haul amounted to only 195 million dollars.

Compared to then, prices have increased by over 400%, bringing the multi-billionaire Elon Musk and his automotive company back into profit.

Compared to the original price of 2021 at which these Bitcoin were initially purchased, we count an unrealized profit of 495 million dollars.

By also considering all the operations closed in losses, we can state that if Tesla were to sell the last 11,500 Bitcoin now, it would close the entire investment with a profit of approximately 200 million dollars.

The dashboard of the Arkham Intelligence platform shows the current crypto assets of the company.

In November, the news emerged that Tesla was moving its entire stack of Bitcoin to a new address for cryptocurrencies.

We do not know the reason for this shift, but we might be close to Elon Musk’s next unexpected move.

It is unlikely that these coins will be sold now, given Musk’s support for Trump’s election campaign, with the new president fully supporting the crypto.

We might instead expect a new purchase, capable of triggering a new wave of FOMO in 2021 style.

Elon Musk had indeed stated that he would resume embracing Bitcoin if mining became sustainable with 50% renewable energy.

According to the data from the Bitcoin Mining Council, it has already surpassed that green mining threshold for some time.

After the latest news on the front of the USA elections, the price of Bitcoin soared, registering several continuous all-time highs in the market.

Tesla or not, in this round of bull market the currency is advancing towards new horizons following the narrative of mainstream adoption.

First with the launch of the ETFs in January, then with the presidential support of Donald Trump in November, Bitcoin goes its way breaking every record.

Prices yesterday increased up to briefly reaching the 90,000 dollar mark, only to then make way for a brief retracement by the bear.

Various publicly traded companies are celebrating their entry into the world of crypto, placing BTC as a strategic reserve of their finances

Enthusiasm and FOMO for speculations are returning, accompanied by an increase in searches for the query “Bitcoin” on Google Trends.

Both institutional with ETFs and retail with exchanges have returned to lead the cyclical four-year phase of the Bitcoin mania.

This bullish phase on Bitcoin is also pushing up the price of those company stocks that base their business on the cryptographic sector.