Though Tesla’s (NASDAQ: TSLA) history with Bitcoin (BTC) mostly ended in July 2022, when the electric vehicle (EV) maker sold about 75% of its cryptocurrency, it experienced an unexpected revival on October 15 and 16, 2024.
Specifically, Tesla started moving vast quantities of BTC to previously unknown addresses on the afternoon of October 15 and had, across a total of 26 transactions, transferred some $760 million worth of the coin, per the data retrieved from Arkham Intelligence.
The transfers – which involve virtually all of Tesla’s remaining 11,510 Bitcoins – quickly drew the crypto community’s attention and sparked speculation on the EV maker’s intentions.
Is Tesla planning to remove its Bitcoin exposure?
Perhaps the most obvious explanation – though not necessarily true – is that Tesla is preparing to sell its remaining Bitcoin.
Indeed, the EV maker’s wallet remained dormant during much of the ‘crypto winter’ – when BTC was mostly trading below $20,000 – and came to life in ‘Uptober’ of 2024 after the cryptocurrency had experienced a protracted period of strong performance.
So far, Bitcoin is up 58.89% in 2024 and had risen to $67,708 by press time on October 16. Simultaneously, the most recent trading saw BTC break its summertime downtrend and again appear poised to try and hit a new all-time high.
Such a setup would make selling the cryptocurrency lucrative for Tesla, and as its current situation and historical actions demonstrate, it has an incentive to make a quick buck in the cryptocurrency markets.
How Tesla came to own Bitcoin
Though intentional ill-doing was never confirmed, Tesla’s original brush with Bitcoin remains somewhat controversial. In January 2021, the EV maker invested approximately $1.5 billion in BTC, and in March of the same year, the firm revealed it would accept the cryptocurrency as payment.
Thanks to Musk’s popularity and reputation and Tesla’s overall importance, the revelations helped Bitcoin experience a substantial rally from its January 2, 2021, price of approximately $31,000 to about $58,000 on March 20 of the same year.
While the community initially welcomed the moves, they quickly drew criticism as, in April 2021, Tesla sold a part of its BTC, making more than $100 million in profits and, just weeks later, in May, Musk said his firm would no longer accept the cryptocurrency due to environmental concerns.
Is Tesla using Bitcoin to improve quarterly financials?
Not only did the sequence of events raise some allegations of market manipulation, but it also – together with environmental tax credits – had a meaningful impact on Tesla’s quarterly results.
In October 2024, Tesla is again likely to face a week-long quarterly report due to the pressure from the prevailing ‘EV winter’ and the immediate lack of success for the recent ‘We, Robot’ event.
Still, while selling the $770 million worth of Bitcoin would positively impact Tesla’s financials, these would be reflected only in the report covering the final trimester of 2024.
Furthermore, no market manipulation or other unsavory activity was proven in 2021 – even though crypto traders faced a 12% BTC downturn within a day after Tesla stopped accepting the cryptocurrency.
Additionally, though some of the events indicate Musk partially influencing and partially just taking advantage of BTC’s movements, it is worth pointing out that the 2022 sale of the majority of the EV maker’s cryptocurrency was executed at a loss.
Ultimately, though there is plenty of room – and some backing – for theories centered on Tesla planning to sell its BTC, perhaps even to bolster its future reports with a major realized crypto market gain, it is equally possible the move is either a simple reshuffling of assets or an innocent attempt to make back some of the original investment.
Still, cryptocurrency traders should be wary of Tesla’s possible selling as the sudden inflows of such a quantity of BTC into the market could cause significant downward pressure.
