By Joanna Ossinger
Elon Musk said Tesla Inc. sold 10% of its Bitcoin holdings to demonstrate the token’s liquidity, adding that it kept his personal investment in the cryptocurrency.
Tesla’s earnings report showed that the company, which purchased more than $ 1 billion of the tokens earlier this year, generated $ 101 million in revenue from the sale. Musk said on Twitter that Tesla was essentially trying to “prove Bitcoin’s liquidity as an alternative to keeping cash on balance sheet.”
The electric vehicle manufacturer has put cryptocurrencies on the agenda of treasurers around the world with its investment in Bitcoin. While many continue to view the token as simply too risky to compare to cash, Tesla’s chief financial officer Zachary Kirkhorn said on a earnings call that the company believes in Bitcoin’s long-term value.
@stoolpresidente No you don’t. I haven’t sold any of my bitcoin. Tesla sold 10% of its stakes mainly to p… https://t.co/JMnjABou4g
– Elon Musk (@elonmusk) 1619478901000 For a number of strategists, Bitcoin and other tokens are more purely speculative investments than legitimate alternatives to cash. For example, BCA Research Inc. argues that because of its volatility, Bitcoin fails as a store of value or a unit of account, even though these are fundamental functions of money.
However, Musk has been a well-known proponent of cryptocurrencies for some time, and announced late last month that Tesla will start accepting payments for its vehicles in Bitcoin.
The world’s largest cryptocurrency rose 1% to $ 53,765 at 12:16 p.m. in Tokyo on Tuesday. It fell from a high of nearly $ 64,870 in mid-April, but has still increased seven-fold over the past year.
Tesla even fell 3.1% in late trading after the results were announced on Monday, despite a record profit in the first quarter.