Elon Musk’s company, Tesla (TSLA), has been connected to Bitcoin (BTC) and other digital assets such as Dogecoin (DOGE) since 2021. Musk’s tweets and views on Bitcoin and Dogecoin have played a role in their price action over that time as well.
When Musk tweeted that Dogecoin was going to be accepted for Tesla merchandise the asset jumped over 30%, and Musk’s tweets about DOGE were a large catalyst in the asset reaching its all time high that it’s now down well over 90% from. Let’s talk more about Tesla’s history with Bitcoin before discussing their current holdings.
Tesla’s History With Bitcoin
Tesla first made a splash with Bitcoin when they purchased $1.5 billion in BTC in early 2021, which at the time worked out to 37,500 Bitcoins. This purchase spurred Bitcoin to a new all time high of over $42,000 USD at the time. Musk seemed bullish on Bitcoin, adding the cashtag to his Twitter and even saying, “I think Bitcoin is on the verge of getting broad acceptance by conventional finance people.”
Musk even alluded to Tesla starting to accept Bitcoin as a form of payment for their vehicles. He quickly retracted that possibility and began opining about the energy consumption of mining Bitcoin. This had the opposite effect of the initial purchase, sending the price down 15% at the time. Though they were no longer accepting Bitcoin, Tesla hadn’t yet sold any of its Bitcoin holdings at this time.
In July 2022, Tesla, through its financial report, announced that they had sold 75% of their Bitcoin holdings, which sent the price down just under $1,000 that day to the mid $22k range. Bitcoin had already been on a downtrend for a while when Tesla disclosed this, and it was likely a loss when they made the sale.
Tesla’s Current Bitcoin Position
Since that time, Tesla hasn’t bought or sold any more Bitcoin. Their earnings report released in mid-July showed that their digital asset holdings were the same as they had been for the last four quarters. Their sale last year was their last move with the king of crypto, and it’s curious that they’ve held onto their position for so long since.
Conversely, other companies like MicroStrategy have used Bitcoin’s price over the last year as a buying opportunity, with Michael Saylor’s company adding $347 million more in BTC to their holdings.
What This Means For Bitcoin
There’s not much to be inferred from the lack of a move by Tesla regarding their Bitcoin. It could be seen as them hedging their bets by holding onto the asset in case it does go on a big bull run. But by not adding any more Bitcoin to their holdings it is clear they’re not overly bullish on the asset either.
The company appears to be fairly neutral for once in their opinion of Bitcoin, but it’s only a matter of time before another tweet changes things.