Tesla’s earnings report showed the firm — which bought more than $1 billion of the tokens earlier this year — generated $101 million in income from the sale. Musk said on Twitter that Tesla in essence was trying “to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”
The electric-vehicle maker forced cryptocurrencies onto the agenda of corporate treasurers worldwide with its investment in Bitcoin. 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.
So am I understanding this correctly? @elonmusk buys #bitcoin. Then he pumps it. It goes up. Then he dumps it and make a fortune. Listen I own 1 #Bitcoin but #bitcoin is exactly who we thought it was. Just don’t be last 1 #HODLing the bag.
— Dave Portnoy (@stoolpresidente) April 26, 2021
For a number of strategists, Bitcoin and other tokens are 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 late last month announced that Tesla would begin accepting payment for its vehicles in Bitcoin.
The world’s largest cryptocurrency climbed about 1% to $53,765 as of 12:16 p.m. in Tokyo on Tuesday. It’s tumbled from a peak of almost $64,870 in mid-April but is still up sevenfold in the past year.
Tesla fell as much as 3.1% in late trading after its results were announced Monday despite a record profit in the first quarter.