Tesla held on to bitcoin despite massive sell-offs amid 2022 bear market

Tesla held on to bitcoin despite massive sell-offs amid 2022 bear market

According to an SEC filing, Elon Musk’s electric vehicle business Tesla did not sell the remains of its bitcoin stockpile during the fourth quarter of 2022, as planned.

Tesla’s Q4 and FY 2022 update state that the company continued to HODL a portion of its crypto fortune even after the crypto market crashed and negative news that impacted the crypto ecosystem, such as the bankruptcy of major firms in the industry, information which darkened the ecosystem.

The value of Tesla’s bitcoin (BTC) holdings should be somewhere in the neighborhood of $245 million. This would represent the last 25% of all the bitcoin the business acquired during the crypto bull run of 2021.

Tesla’s history with bitcoin

Tesla was one of the first firms to spend vast sums of money on bitcoin, and its initial purchase contributed to the bullish rise that drove the price of bitcoin from roughly $20,000 to almost $70,000.

However, it began to lose faith in its investment owing to bitcoin’s use of energy, which resulted in Tesla ceasing to accept bitcoin payments for the purchase of its automobiles in May of 2021. The bitcoin price quickly dropped from $55,000 to $52,000 in hours.

Tesla made a purchase of 43,200 BTC for a total of $1.5 billion during the first quarter of the year 2021. Despite the commencement of the COVID-19 pandemic, which resulted in significant layoffs and the collapse of several enterprises in the United States, the corporation continued to hold onto its bitcoins for more than a year.

Elon Musk: I have nothing against bitcoin

However, after the purchase, Elon Musk, CEO of Tesla, announced in July 2022 that the company was forced to sell 75% of its bitcoin for the price of $936 million due to the increase in the company’s production costs in China, which had skyrocketed to levels that had never been seen before in the wake of the coronavirus outbreak.

Musk, however, made it clear that the firm had nothing against BTC and was “open to expanding bitcoin holdings in the future.” He also said that the corporation had nothing against bitcoin. He added that the uncertainty surrounding the COVID lockdowns in China and the necessity to optimize the company’s financial position were the reasons for the sale and that these were the reasons for the decision to sell.

Musk also disclosed in March 2022 that he had his bitcoins and has no plans to sell them in the foreseeable future. In addition, Musk has always been open about his enthusiasm for cryptocurrencies in general and bitcoin and other digital tokens in particular, notably Dogecoin. It’s conceivable that the corporation is just hoarding its Bitcoin as a long-term investment while they wait for the appropriate moment to make a move, but it’s also likely that they’re waiting for the proper time to make a move.

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Brenda Mary

Brenda Mary is a crypto enthusiast and a graduate of The University of Nairobi in economics. Brenda’s passion brings her back to her elementary school years as a poet. She enjoys discussing blockchain technology and is committed to producing original content. Brenda also covers other rapidly developing markets and economic and cryptocurrency studies.