Elon Musk is the world’s richest man and he was asked in an interview once would you rather be a billionaire or a meme Lord of course Elon Musk said he’d rather be a meme lord. Now that Meme Lord’s activity brought him into the world of Bitcoin, cryptocurrency. He actually put 1.5 billion dollars of Bitcoin on the Tesla balance sheet about a year and a half ago and now tesla sold out 75% of bitcoin holdings. What’s Tesla bitcoin selling effects.
In the summer of last year, they sold 10% of that Bitcoin at a profit and they said that they were simply trying to test the market liquidity. So they had somewhere around 1.2 to 1.3 billion dollars of Bitcoin. In their most recent Financial disclosures, they went ahead and reported that they sold 75% of their Bitcoin position. That’s 75% sale netted them about 936 million dollars onto their balance sheet.
Now you may remember last July Elon talked about cryptocurrency and here’s what he said. He said I made pumps but I don’t dump. I would like to see Bitcoin succeed now which leads to the question of why exactly is Tesla sold out 75% of Bitcoin holdings.
Tesla bitcoin selling effects: Well, it’s because they needed the cash Elon’s quoted as saying that their sale should not be taken to some verdict on bitcoin. Instead, they sold their bitcoin because of the liquidity of the company. So that they needed the cash he also states that they did not sell any of their Dogecoin and he believes that crypto is a sideshow to the sideshow.
Now my takeaway from all of this is that Elon’s running a business need to have a strong balance sheet they need to have cash flow that’s what he’s focused on doing. Their investment in Bitcoin he rode the wave he created plenty of press the critics hated it and in some way, he was sticking it to the Man.
Tesla bitcoin selling effects the more interesting takeaway from the recent developments of this sale is that the market basically didn’t care. When they announced that they had sold 75% of their Bitcoin the market went down like one percent or so. They literally just did not care at all that the world’s richest man and one of the largest companies in the world tesla sold out 75% of bitcoin holdings. That’s because the market is maturing the impact of one individual or one company is lessening day by day.
Ultimately a more mature Market is exactly what we should want to see. We don’t want to have a market that responds very sensitively to any one announcement from a business or an individual. Instead what you want is a robust Market structure with deep liquidity where anyone in the world can participate and not have to worry about what’s the next press release ready to drop.
Ultimately Elon Musk still owns a ton of Bitcoin SpaceX balance sheet personally. He also has about 200 million dollars of Bitcoin on the Tesla balance sheet. I think they just needed the cash and that’s okay. Because in some ways Bitcoin served as a great store of value they lost a little bit maybe five, seven, or eight percent on the Bitcoin position. If you take into account inflation in some way Bitcoin actually held more value over the last 12 months than cashed it. Now that’s not something that you’ll hear in the mainstream media.