Tesla and Bitcoin have long had a complicated relationship.
Back in February 2021, the world’s biggest cryptocurrency accelerated to a new all-time high of $47,000 after the electric vehicle manufacturer announced that it was investing $1.5 billion into BTC. Make no mistake, this was huge news: a publicly listed company with international brand recognition was embracing Bitcoin.
Tesla’s forward-thinking move followed Elon Musk’s continued tweets about Bitcoin and Dogecoin — erratic posts that had the potential to move markets. Just a month before this announcement, BTC had rallied by 20% after the billionaire added the #bitcoin hashtag to his Twitter bio. It didn’t take long for Tesla to embark on multiple U-turns. By May 2021, Tesla announced that it was suspending vehicle purchases using Bitcoin, with Musk declaring to his followers: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
While MicroStrategy was the first firm to add BTC to its balance sheet in August 2020, it was hardly a household name.
But the worst was yet to come. By July 2022, Tesla had confirmed that it had in fact sold 75% of the 38,747 BTC it had remaining — and at a loss. Figures from Arcane Research at the time suggested that 29,060 BTC had been offloaded at an average price of $32,209 each — generating revenues of about $936 million.
There was another cloud on the horizon. Just two months after buying 43,053 BTC, it was confirmed that 10% of this crypto stash had been sold off — with executives claiming this was designed to demonstrate that Bitcoin is a liquid asset.