{"id":11496,"date":"2023-04-15T12:00:56","date_gmt":"2023-04-15T12:00:56","guid":{"rendered":"https:\/\/www.cryptoheretostay.com\/?p=11496"},"modified":"2023-04-15T12:00:57","modified_gmt":"2023-04-15T12:00:57","slug":"tesla-selling-bitcoin-last-year-turned-out-to-be-a-500m-mistake","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=11496","title":{"rendered":"Tesla selling Bitcoin last year turned out to be a $500M mistake"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>The price of Bitcoin (BTC) has grown by more than 50% since Tesla unveiled its approximately $1-billion BTC sales in July 2022. In other words, the Elon Musk-owned electric carmaker would have made an additional $500 million if it had waited until today to sell.\u00a0<\/p>\n<h2>Are Tesla\u2019s Bitcoin trades profitable?\u00a0<\/h2>\n<p>Tesla infamously dumped nearly $936 million of its total Bitcoin holdings in Q2 2022, accounting for 75% of its remaining reserves, to secure $64 million in profit. At the time, Bitcoin was trading about 70% lower than its record high of $69,000 in November 2021.<\/p>\n<p><em>BTC\/USD monthly price chart featuring Tesla\u2019s Bitcoin sales purchases and sales. Source: TradingView<\/em><\/p>\n<p>Originally, Tesla purchased $1.5 billion worth of Bitcoin in February 2021\u00a0at an average price of $36,000. The company then sold BTC worth $272 million to boost its Q1 2021 accounting by $101 million. <\/p>\n<p>The company has nevertheless\u00a0held on to its remaining BTC\u00a0as of Q4 2022\u00a0despite the price of Bitcoin sitting at bear-market lows of around $16,000 at the time. Today, Tesla holds 10,725 BTC worth around $330 million, almost 15% below the procurement value from February 2021.<\/p>\n<p>Overall, Tesla made roughly $165 million in profit from two separate Bitcoin sales. As of April 14, it sits atop an unrealized loss of around $56.6 million on its remaining BTC holdings, while its net profit to date sits at around $108 million.\u00a0<\/p>\n<h2>Will Tesla dump its remaining BTC holdings?<\/h2>\n<p>Interestingly, Tesla\u2019s previous Bitcoin sales came from weaker free cash flows. For instance, the Q1 2021\u2019s BTC sale worth $272 million made up nearly 93% of Tesla\u2019s free cash flows in the same quarter.<\/p>\n<p><em>Tesla free cash flows performance by quarter. Source: Statista<\/em><\/p>\n<p>Similarly, Tesla\u2019s Bitcoin sales in Q2 2022 came as its free cash flows declined 73% versus the previous quarter. Both sales suggest that Musk relied on Bitcoin as a haven during Tesla\u2019s cash crunch phases.<\/p>\n<p>The Tesla CEO explained at the time that the sale was made to \u201cprove liquidity of Bitcoin as an alternative to holding cash on a balance sheet.\u201d<\/p>\n<p>Meanwhile, Wall Street analysts estimate that Tesla\u2019s free cash flow in Q1 2023 could be nearly $2 billion, up 40% versus the previous quarter. This should reduce the chances of Tesla dumping any significant Bitcoin amount in the near term.<\/p>\n<p><strong><em>Magazine:<\/em><\/strong> <strong><em>Bitcoin in Senegal: Why is this African country using BTC?<\/em><\/strong><\/p>\n<p class=\"post-content__disclaimer\">This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.\n<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/tesla-selling-bitcoin-last-year-turned-out-to-be-a-500m-mistake\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The price of Bitcoin (BTC) has grown by more than 50% since Tesla unveiled its approximately $1-billion BTC sales in July 2022. In other words, the Elon Musk-owned electric carmaker would have made an additional $500 million if it had waited until today to sell.\u00a0 Are Tesla\u2019s Bitcoin trades profitable?\u00a0 Tesla infamously dumped nearly $936 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":11497,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-11496","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/11496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11496"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/11496\/revisions"}],"predecessor-version":[{"id":11498,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/11496\/revisions\/11498"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/11497"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}