It’s time for another edition of “By The Numbers.” This time, we’ll use a pseudonymous analyst’s numbers to find out if Tesla is in the red when it comes to their Bitcoin holdings. The caveat here is, if bitcoin’s price loses the $30K level, could Tesla’s board pressure Elon Musk into selling? And if they do, would that cause another series of red candles? In any case, we’re just speculating.
Let’s stop that and go to the numbers.
$1.5Bil BTC purchase announced 2/8/21
BTC avg price 1/1/21 to 2/7/21 = $35,150
BTC bought = 42,674
Sold 10% for $272mil
Exposure = $1.228bil
BTC Remain = 38,406
Current value = $1.26bil
— Nunya Bizniz (@Pladizow) July 14, 2021
As you can see, they’re on the edge. Tesla took profit when they sold that 10% for $272M “to test liquidity.” And the current price is just s tad below the $35K average they paid for their bitcoin. In any case, Tesla currently owns approximately 38,406 BTC. And 1 BTC = 1 BTC.
How Did Tesla Got Here?
The funny thing is the perception that Elon Musk is at least partially responsible for Bitcoin’s recent price action. When Tesla announced their bitcoin investment the price went up like crazy. When they announce they were not accepting bitcoin as payment anymore for bogus reasons, the price crashed. However, correlation doesn’t imply causation. Did Tesla really move the dial that much or was it an optical illusion? We could only speculate.
However, when Musk tweeted this:
This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.
When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.
— Elon Musk (@elonmusk) June 13, 2021
We at Bitcoinist reported:
Musk’s cautious optimism towards the major cryptocurrency uplifted investor spirits, as Bitcoin rose nearly 15%. The CEO also confirmed that Tesla had only sold 10% of its holdings to “confirm BTC could be liquidated easily without moving [the] market.” Just hours following his tweet, Bitcoin surged from $35,000 to $40,000 overnight.
And we also reported on another kind of Bitcoin trend that Tesla seems to have started:
Ironically, data from Glassnode indicates that when Tesla announced its Bitcoin purchase, the crypto market initiated a trend. As depicted below, from February 2021 until the recent crash, the supply held by entities with balances of 100 or 1,000 BTC increased exponentially.
In other words, Bitcoin whales have been accumulating and have been doing so at a faster pace from the day Elon Musk’s company enter the crypto market.
Those two instances are not definite proof either, but the trend is clear. Tesla’s actions seem to be linked to Bitcoin’s price in more ways than one. And if said price falls below the $30K line, Tesla could be inclined to sell and all hell could break loose.
However, these are just speculations.
BTC price chart for 07/14/2021 on Bitbay | Source: BTC/USD on TradingView.com
Why Would Elon Musk Play With Bitcoin’s Price If He’s Got Skin In The Game?
Nobody knows for sure, but there are theories floating around. ARK Invest’s Catherine Wood, one of Tesla’s biggest supporters and shareholders, said once:
“I believe what happened is after he took a position in bitcoin he got pushback from inst shareholders like BlackRock. You’ve got Larry Fink beating the drum on climate change. I don’t think he expected that. But I think he’ll come back to the mix.”
Related Reading | Wall Street Survey Says: Bitcoin To Close 2021 Under $30K
And according to the infamous Max Keiser, Tesla’s CEO is just “a Bitcoin noob making all the same noob mistakes.” Exploring that idea, our sister site NewsBTC concluded:
When a great mind accompanied by a big ego encounters Bitcoin, it immediately gravitates towards trying to fix it. Elon is not the first and will not be the last. Every great Bitcoin thinker out there had an Altcoin phase. They all thought that maybe a new idea had come along that made Bitcoin obsolete.
Eventually, they all realize that Bitcoin is more of a miracle than a technology. That the economic incentives are right where they belong, and that it’s a machine with the potential of improving the world for everyone.
In any case, Tesla still holds approximately 38,406 BTC, and those are worth approximately $1.26B. Musk still claims that his company has diamond hands and will not sell. Bitcoin’s price is above $30K and Tesla is barely in the red. There’s nothing to worry about.
Featured Image by Blomst from Pixabay - Charts by TradingView