Elon Musk said Tesla Inc. had sold 10% of its Bitcoin holdings. He said that the primary purpose was to demonstrate the liquidity of the token while adding the fact that he has retained his investment for cryptocurrency.
The earning reports of Tesla are showing the firm – which has bought more than $1 billion of tokens earlier this year and produced $101 million in income from its sale. Musk tweets saying that Tesla, in essence, tried to prove the liquidity of bitcoin as an alternative to hold cash on the balance sheet.
The electric vehicle maker compelled cryptocurrencies on their agenda of corporate treasuries worldwide with their investment in Bitcoin. Many others are continuing to view the token as a riskier one compared to cash. Zachary Kirkhorn, the Chief Financial Officer of Tesla, said on an earnings call that the company believes in the long-term value of Bitcoin.
For several strategists, Bitcoin and other tokens are much speculative for investments rather than being legitimate alternatives to cash. For example, BCA Research Inc. is arguing that Bitcoin fails as a store of value or a unit of account due to its volatility, though these are the standard functions of money.
However, Musk has also been a high-profile supporter of cryptocurrencies. He has started showing his interest earlier, sometimes. And last month, he opted for announcing that Tesla would start accepting payments for its vehicles in Bitcoin.
The largest cryptocurrency in the world is now climbing by 1% to $53765 as of 12:16 p.m. in Tokyo on Tuesday. It has, however, tumbled from the peak of its mark of $64870 in mid-April. But it is still up by sevenfold from the past years.
Tesla is falling by 3.1% from the late trading after the announcements of its results from Monday, despite the record of the profit from the first quarter.