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Has Tesla Already Sold All of Its Bitcoin?
Like it or not, but Tesla still remains pivotal to the bitcoin market. The carmaker’s purchase of $1.5 billion in BTC in February pushed the cryptocurrency to record highs, while its announcement that it would stop accepting BTC as payment sent the latter plummeting to 2021 lows.
Tesla’s influence over the bitcoin market has caused certain observers to question whether the manufacturer has already sold its stash of some 46,000 bitcoins. Some accuse the company of performing a pump-and-dump on bitcoin, while outlets such as Business Insider have noted that, in the wake of the June 22 price crash, Tesla will lose money on its BTC holdings, unless it hasn’t already sold them.
However, Elon Musk has denied that Tesla has offloaded all its bitcoin, admitting only that it sold 10% of its stash in April in order to test liquidity. Lying about this would seriously damage Musk and Tesla’s reputation, while not declaring a major sale of assets would also potentially attract regulatory scrutiny. This makes it unlikely that Tesla really has sold its holdings, although its next quarterly financial update — due on July 28 — may tell us otherwise.
Mounting Claims Tesla Has Sold Its Bitcoin
Perhaps the strongest claim that Tesla has sold all its bitcoin came from Magda Wierzycka, the CEO of South African cybersecurity firm Sygnia. Speaking to The Money Show podcast, Wierzycka suggested that Musk and Tesla had deliberately announced its purchase of bitcoin in order to pump the cryptocurrency’s price. The company then offloaded most or all of its BTC when the market closed in on its top, leaving thousands if not millions of retail investors holding its bags.
“What we have seen with bitcoin is price manipulation by one very powerful and influential individual,” she said, adding that Tesla likely “sold a big part of his exposure at the peak.”
Musk was quick to deny such claims, writing on Twitter that “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving [the] market.”
Source: Twitter
Unfortunately, such protestations haven’t stopped speculation regarding Tesla’s bitcoin holdings. Numerous analysts and commentators have voiced uncertainty and bewilderment on whether Tesla still owns BTC, with comments increasing exponentially on June 22, when the price of bitcoin plummeted by around 11% in a few hours, to less than $30,000.
Source: Twitter
Prominent Tesla-focused Twitter account @TESLAcharts posted a poll on June 22, with 70.3% of 788 respondents stating they believed Tesla has sold its bitcoin, contrary to Musk’s denials.
Source: Twitter
Even the mainstream media is getting in on the act, with Business Insider noting on June 22 that Tesla’s accounts moved into the red when bitcoin fell to $29,000, unless of course the company had shed its BTC some time ago.
Source: Twitter
One individual even claims to have found the wallet address that Tesla used to purchase — and then sell — its bitcoin.
Source: Twitter
Assuming that this really is and was Tesla’s address, the company would have sold off its bitcoin at the end of May.
Source: Twitter/TESLAcharts
What Evidence?
However, if you actually take a look at the address identified as being Tesla’s, things don’t really add up.
Firstly, it has received — and sent — 332,776.35 bitcoins, which are currently worth $11.3 billion. That’s nearly ten times the amount Tesla declared buying in February.
As people have pointed out on Twitter, lying about the amount held — as well as lying about only selling 10% of its bitcoin holdings — would potentially constitute public statement fraud, an offense punishable by the Securities and Exchange Commission.
This might make a deception on Tesla’s part seem unlikely, although Musk has in fact already been charged with securities fraud by the SEC once before. This was in September 2018, after Musk had tweeted that he was ready to take Tesla private, something which caused Tesla’s stock to jump by over six percent.
Musk and Tesla settled with the SEC for $40 million, with Musk also stepping down as chairman. Basically, some people seem to think that this was only a slap on the wrists as far as Musk was concerned, and that he doesn’t really care about incurring the SEC’s wrath.
Source: Twitter
In other words, misrepresenting the sums of bitcoin involved, as well as misrepresenting whether or not Tesla sold its bitcoin, is not decisive proof that the carmaker hasn’t sold its holdings.
Indeed, given the direction the market has taken in recent months, it may end up being a catastrophic mistake if Tesla hasn’t sold its bitcoin. The company had the chance to sell just over 40,000 bitcoin (if not more) at a price of over $60,000, something which would have reaped $2.4 billion, or a profit of around $1 billion. Assuming that Tesla and Musk are savvy operators, this reasoning alone would suggest they did sell their bitcoin near the market top.
But again, Musk has flatly denied that Tesla has sold all of its bitcoin. He has done this on numerous occasions, even tweeting on May 19 that the company has ‘diamond hands’ when it comes to BTC.
Source: Twitter
Then again, he also tweeted some bizarre breakup-themed tweet on June 4, inadvertently (or not) creating confusion.
That said, given his most recent denial (on June 13), it would seriously damage Musk’s reputation if it emerges he’d been lying. While he may not fear reprisals from the SEC, he might have some concern for his brand and that of his company. If it were to transpire that Tesla had sold its bitcoin some time ago, his status and standing may take quite a knock.
With Tesla’s next quarterly report due on July 28th, it won’t be long before we receive some clearer indication of whether the company really has sold its BTC. Its last report was published on April 26, giving it plenty of time between then and now to realize a sizable profit on its investment. If it has sold, this could hurt bitcoin’s price even further. But then again, Tesla’s exit might save the bitcoin market from an arguably toxic influence.
