Tesla Bought 1.5 B in Bitcoins

[whyrqa]

In any market, there is a rise and fall in the rates of certain assets and the reasons are different. Everyone knows that Tesla shares broke another growth record and reached a maximum of $ 900 in early 2021, and the current drop in quotations is just a price correction after super growth, and the result of macroeconomic and market problems as a result of the pandemic. It's no secret that Tesla's business and other areas are developing with outstanding tepps and the recent decline in the share price is practically nothing in comparison with future achievements and the trend of another growth remains a matter of time.

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[The Sceptical Chymist]

It's unclear if Tesla has sold any of the bitcoin yet.

I seriously doubt that.  Tesla isn't in the business of speculating in cryptocurrency, and if they did indeed do that I'm pretty sure their shareholders might have a problem with what would amount to gambling on a very risky asset.  I think Tesla, along with other companies like MSTR, bought bitcoin for the long-term as an alternative to cash (which any profitable corporation should have on hand). 

So a paper profit is exactly what Tesla made thus far unless they say otherwise.  I would also think that if they had sold their bitcoin investment, it would have adversely affected bitcoin's price--but we haven't seen that happen, just dips.  I'm just hoping that if bitcoin starts to slide that these companies who invested heavily in it stick it out and don't sell.  If they were to do that, it would be carnage on the market and 2017 would seem like a banner year for bitcoin by comparison.

[fillippone]

Apparently, Elon wasn't satisfied with only 1.5B:

Elon Musk Owns $5 Billion in Bitcoin Collectively, Claims Anthony Scaramucci

• Now, though, SkyBridge Capital’s founder, Anthony Scaramucci, took it to Twitter to assert that Musk didn’t stop with only one BTC purchase for Tesla. Although he failed to provide sources, Scaramucci said: “I understand that SpaceX owns bitcoin on its balance sheet.”
  
• Furthermore, he believes that the CEO of Tesla and SpaceX has bought some portions of the cryptocurrency for himself and owns over $5 billion through his companies and personally.

Well, this might be true.
After all, in this thread, we recalled the SpaceX CFO being present at the Microstrategy conference, and I can't see why SpaceX, which is a private company, shouldn't have invested a tiny portion of their cash into bitcoin. Asymmetrical risk management should be one of the cups of tea of a rocket company, after all.

[rosenbauer02]

<snip>

It would be possible for Elun to get more BTC in the process after getting some lately. He sees BTC has really had a future and that means other CEO's can also follow. It will not be too late for everything in bitcoin. We all know that bitcoin has already prove its worth and the only thing to do is to trust the process just like what others had done and benefited with bitcoin.

There are many reason to think of why bitcoin to chose. Bitcoin has open doors to opportunity and privilege that could uplift lifestyle and moral bitcoin holder after taking its risks. You know what I mean is that bitcoin if considered as investment is profitable. Many had seen now the profits of others holding bitcoin. Lesser did know that even just before pump its market others had already benefited with bitcoin.

For now it would be a bad mindset to think that bitcoin will no longer profitable just because of the current market. Elun must only the first to go out with bitcoin and higher chance that other CEO will going to follow. Who knows it would be like Jack Ma in the future?

[Sithara007]

Well, this might be true.
After all, in this thread, we recalled the SpaceX CFO being present at the Microstrategy conference, and I can't see why SpaceX, which is a private company, shouldn't have invested a tiny portion of their cash into bitcoin. Asymmetrical risk management should be one of the cups of tea of a rocket company, after all.

Might be true, might be false. SpaceX is a privately held company and they don't need to reveal the details of assets they own. Now the question is whether it is possible for SpaceX to own $5 billion worth of BTC. Elon has previously stated that he doesn't directly own any BTC (apart from the BTC0.25 that he received as a gift). The annual revenue of SpaceX is around $2 billion. Is it possible for such a company to make a $5 billion investment in BTC? I don't think so.

[mazdafunsun]

Before this happened i watched a video by guy who is a pretty good trader and he was speculating that tesla could invest in BTC and that would obviously be a huge deal, i was thinking that he is a great traded but this is just stupid. One week later this happens. This was and still is crazy. But from tesla's standpoint this is pure genius, since they are planning accepting BTC payments.

[Darkelf11]

I think there's nothing new if again elon musk do the same thing because he is one of the richest man in the world so he is part of the biggest investor. By the use of his power he can manipulate easily the price of the bitcoin and of course not only this coin as for today there are a lot of coins he wants to burst up there are a lot of rumors that he wants to reach the 1 dollar for the doge coin. It takes more time but there is a possibility.

[Dhoe]

We don't know real or not Tesla company bought 1,5B in bitcoin because they only give announcement, I think every company will make new announcement about buy or sell bitcoin this give effect with bitcoin will higher or lower price. Every new tweet and announcement by bigger company will make bitcoin pump if they make announcement with buying bitcoin, but fi selling bitcoin price will be down although they not sell bitcoin.

[fillippone]

So the big news is of course Tesla is going to accept Bitcoin as a mean of Payment:


https://twitter.com/elonmusk/status/1374617643446063105?s=20

A full review of what happened
Elon Musk says Tesla now accepts bitcoin as a payment method



The nice thing is that everyone got excited about this:

• Whales. They can finally spend their coins directly on real goods, without fiddling with unnecessary fiat gateways.
• Proponents of Bitcoin as an MoE. Who thinks bitcoin should be considered digital cash, (a "peer to peer digital cash" joy of this news, where you can spend your coins to buy a car!
• Free software proponents. See? Tesla is not using a commercial solution for this, but they used free software. Common Licence is good!
• Digital Gold/SoV proponents. Those who think of Bitcoin as an SoV rejoice over the decision of Tesla not to exchange back the bitcoins into fiat money but hold in the hardest asset.

[PrimeNumber7]

So the big news is of course Tesla is going to accept Bitcoin as a mean of Payment:


https://twitter.com/elonmusk/status/1374617643446063105?s=20

Musk says that bitcoin received as payment will not be converted to fiat, however, there are obviously limits to this. Tesla currently pays its suppliers and employees in USD, and if they are receiving BTC for their cars, and not converting the BTC to USD, they are effectively buying BTC. At one point, they will have accumulated too much BTC and will need to dispose of it somehow.

The real big news will be when Tesla is able to start paying their suppliers and/or employees in bitcoin.

[fillippone]

Musk says that bitcoin received as payment will not be converted to fiat, however, there are obviously limits to this. Tesla currently pays its suppliers and employees in USD, and if they are receiving BTC for their cars, and not converting the BTC to USD, they are effectively buying BTC. At one point, they will have accumulated too much BTC and will need to dispose of it somehow.

The real big news will be when Tesla is able to start paying their suppliers and/or employees in bitcoin.

Agree. But at least they are consistent in using bitcoin as a "reserve currency".
If you are using your unit as a Store of Value, it makes sense to convert your unit into the MoE as later as possible.

So for sure, they will pay their suppliers and employees in fiat, for the time being, but they will hold their reserves in bitcoin.
This makes sense, until, as you say, everyone will be directly paid in Bitcoin, then converting into fiat will be totally useless (I guess the last legit use of fiat money will be for paying your due taxes).

[PrimeNumber7]

Musk says that bitcoin received as payment will not be converted to fiat, however, there are obviously limits to this. Tesla currently pays its suppliers and employees in USD, and if they are receiving BTC for their cars, and not converting the BTC to USD, they are effectively buying BTC. At one point, they will have accumulated too much BTC and will need to dispose of it somehow.

The real big news will be when Tesla is able to start paying their suppliers and/or employees in bitcoin.

Agree. But at least they are consistent in using bitcoin as a "reserve currency".
If you are using your unit as a Store of Value, it makes sense to convert your unit into the MoE as later as possible.

So for sure, they will pay their suppliers and employees in fiat, for the time being, but they will hold their reserves in bitcoin.
This makes sense, until, as you say, everyone will be directly paid in Bitcoin, then converting into fiat will be totally useless (I guess the last legit use of fiat money will be for paying your due taxes).

One concern I have about this is that some hold’ers might decide to buy a Tesla with some of their coin they otherwise would have continued to hodl, and will need to sell 25% of sales price to fiat in order to pay capital gains tax.

I believe that Tesla is actually describing their bitcoin holdings as an “investment”. I believe that the majority of their reserves are in USD, and this will probably remain true for the time being.

[fillippone]

<...>

I believe that Tesla is actually describing their bitcoin holdings as an “investment”. I believe that the majority of their reserves are in USD, and this will probably remain true for the time being.

Actually , I am amonst the number of people who think the biggest part in that announcement is that Tesla will not convert their coins back into fiat (at least immediately upon receiving them).
This means they acknolwdge to bitcoin a given virtue as a SoV, even more in the short term!

[fillippone]

<...>

I believe that Tesla is actually describing their bitcoin holdings as an “investment”. I believe that the majority of their reserves are in USD, and this will probably remain true for the time being.

Actually , I am amonst the number of people who think the biggest part in that announcement is that Tesla will not convert their coins back into fiat (at least immediately upon receiving them).
This means they acknolwdge to bitcoin a given virtue as a SoV, even more in the short term!

Elon Musk as the founder of Tesla already knows the benefits that can be obtained from bitcoin that if he keeps a very large amount of his assets in bitcoin, of course it will be safe from taxes and will estimate the value of his bitcoin to increase because the very limited supply of bitcoins will make the price increase and can provide a lot of profit for bitcoin holders.

What if he's not selling his Tesla for Bitcoins, but he's actually buying Bitcoin with his Tesla?
(Saw this on Twitter today, I can't find the original tweet).

[PrimeNumber7]

<...>

I believe that Tesla is actually describing their bitcoin holdings as an “investment”. I believe that the majority of their reserves are in USD, and this will probably remain true for the time being.

Actually , I am amonst the number of people who think the biggest part in that announcement is that Tesla will not convert their coins back into fiat (at least immediately upon receiving them).
This means they acknolwdge to bitcoin a given virtue as a SoV, even more in the short term!

It means that Tesla is speculating the price of bitcoin will increase over time. Bitcoin has a store of value because the market gives it value. I would speculate that Tesla hopes to eventually be able to pay some of their suppliers in bitcoin.

What if he's not selling his Tesla for Bitcoins, but he's actually buying Bitcoin with his Tesla?
(Saw this on Twitter today, I can't find the original tweet).

In effect, that is what Tesla is doing. They are growing their 'investment' in bitcoin via accepting bitcoin for their cars.

[Sithara007]

Musk says that bitcoin received as payment will not be converted to fiat, however, there are obviously limits to this. Tesla currently pays its suppliers and employees in USD, and if they are receiving BTC for their cars, and not converting the BTC to USD, they are effectively buying BTC. At one point, they will have accumulated too much BTC and will need to dispose of it somehow.

The real big news will be when Tesla is able to start paying their suppliers and/or employees in bitcoin.

Your argument is flawed. A few years back when Overstock started accepting Bitcoin as a mode of payment, they also decided the same (i.e to keep the Bitcoin as such, without converting it to fiat cash). One year later, the Overstock CEO (Patrick M. Byrne) claimed that less than 2% of the payments (by volume) are being made with Bitcoin and therefore they have no issues in holding on to BTC. I guess for Tesla the figures will be somewhere closer to this. Instead of 2%, at the most 5% of the payments may be made using BTC. But that is not going to affect them negatively, as the remaining 95% of the payments are being made through fiat currency.

[posi]

<...>

I believe that Tesla is actually describing their bitcoin holdings as an “investment”. I believe that the majority of their reserves are in USD, and this will probably remain true for the time being.

Actually , I am amonst the number of people who think the biggest part in that announcement is that Tesla will not convert their coins back into fiat (at least immediately upon receiving them).
This means they acknolwdge to bitcoin a given virtue as a SoV, even more in the short term!

It means that Tesla is speculating the price of bitcoin will increase over time. Bitcoin has a store of value because the market gives it value. I would speculate that Tesla hopes to eventually be able to pay some of their suppliers in bitcoin.

Literally their plan when they invested in Bitcoin and also accept it as payment was to create more flexibility in terms of making/receving payment and to stimulate/adjust and maximize their return. So base on Elon tweet "when fiat currency has negative real interest, only a fool wouldn’t look elsewhere." I speculate they won't sell their investment atleast throughout this bullish market.

What if he's not selling his Tesla for Bitcoins, but he's actually buying Bitcoin with his Tesla?
(Saw this on Twitter today, I can't find the original tweet).

In effect, that is what Tesla is doing. They are growing their 'investment' in bitcoin via accepting bitcoin for their cars.

That's the plan and the $1.5Billion is just an initial investment while the major investment will be the payment they receive through Bitcoin.

[tbterryboy]

I still think that Tesla accepting bitcoin as payment is a bigger news than the market responded with. It dropped because of that 6 billion options being unlocked but the reality is that we should have reacted to this a lot better.

I get that you may not like bitcoin accepted for a car is a big deal, you may think that way and I respect your opinion, but the reality is that if we end up with more companies starting to accept bitcoin, that would be huge deal. Think about amazon starting to accept crypto again, think about microsoft, think about google, think about facebook, basically think about all the big companies in the world starting to accept bitcoin. That would be a huge dela right? Well that will start only with one company and that company could be tesla, with them starting to accept bitcoin, that could be domino affect that starts mass adoption.

[galestorm]

Is he the reason why bitcoin's value spiked in the last few months? If so thankyou Elon Musk for having such a huge impact on the market. Kidding aside, Musk does see bitcoin's potential and it's great that he announced that Tesla would be accepting payments through bitcoin. He's one of the major influencers that urged others to buy bitcoin and there's no doubt that it is true that he can move markets. He even had such an impact on DOGE coin that it began to increase in value.

[fillippone]

TSLA is releasing their financial results for 21Q1 and revealed an interesting fact:

Tesla Sold Bitcoin in Q1 for Proceeds of $272M

"Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in "Restructuring & Other line) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items. Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses."

Interestingly, they had quite a positive impact from the move:



Please note that they are so in the money that they have more value in Bitcoin now than when they first bought it.
They might be using this trick to boost profitability in "difficult" quarters.