by Elon Musk said Tesla Inc. sold 10% of its Bitcoin holdings to demonstrate the tokens liquidity, while adding that hes retained his personal investment in the cryptocurrency.
Teslas 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, Teslas Chief Financial Officer Zachary Kirkhorn said on an earnings call that the company believes in Bitcoins long-term value.
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
Elon Musk (@elonmusk) 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 worlds largest cryptocurrency climbed about 1% to $53,765 as of 12:16 p.m. in Tokyo on Tuesday. Its 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.
