The electric carmaker bought more than $1 billion of the tokens earlier this year
Elon Musk said Tesla Inc. sold 10% of its Bitcoin holdings to demonstrate the token’s liquidity, while adding that he’s retained his personal investment in the cryptocurrency.
Tesla’s earnings report showed the firm generated $101 million in income from the sale. The electric carmaker bought more than $1 billion of the tokens earlier this year. Musk said on Twitter that Tesla in essence was trying “to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”
He tweeted: 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.
With its investment in Bitcoin, the electric-vehicle maker forced cryptocurrencies onto the agenda of corporate treasurers worldwide. While many continue to view the token as just too risky to be compared with cash, Tesla’s Chief Financial Officer Zachary Kirkhorn said on an earnings call that the company believes in Bitcoin’s long-term value.
Crypto currencies continued to be debated, with a number of strategists considering Bitcoin and other crypto currencies to be purely speculative investments rather than legitimate alternatives to cash.
For instance, BCA Research Inc. argues that Bitcoin fails as a store of value or unit of account owing to its volatility, even though these are basic functions of money.
However, Musk has been a high-profile supporter of cryptocurrencies for some time and announced late last month that Tesla would begin accepting Bitcoin as a payment method for its vehicles.
The world’s largest cryptocurrency jumped nearly 1% to $53,765 as of 12:16 p.m. in Tokyo on Tuesday. It’s slumped from a peak of nearly $64,870 in mid-April but is still up sevenfold in the past year.
Tesla dropped as much as 3.1% in late trading after its results were announced Monday despite a record profit in the first quarter.
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