Elon Musk stated that Tesla Inc. sold 10% of its Bitcoin assets to show the token’s liquidity, but that he has kept his Bitcoin investment. According to Tesla’s earnings report, the company earned $101 million from the selling of the tokens, which it purchased for more than $1 billion earlier this year.
On Twitter, Musk said that Tesla in essence was trying “to prove liquidity of as an alternative to holding cash on balance sheet.” With its investment in Bitcoin, the electric vehicle manufacturer pushed cryptocurrencies onto the radar of corporate treasurers across the world. While many people still see Bitcoin as too risky to be equivalent to cash, Tesla’s Chief Financial Officer Zachary Kirkhorn said on an earnings call that the company believes in its long-term value.
Musk, on the other hand, has long been a vocal advocate of cryptocurrencies and revealed late last month that Tesla will begin accepting Bitcoin as payment for its automobiles. As of 12:16 p.m. in Tokyo, the world’s largest cryptocurrency had risen about 1% to $53,765. It’s down from a high of nearly $64,870 in mid-April, but it’s still up sevenfold in a year.
Despite a record profit in the first quarter, Tesla’s stock dropped as much as 3.1 percent in late trading after the company’s results were released Monday.