Investor's Corner

Did Elon Musk hint that Tesla has broken up with Bitcoin?

Tesla CEO Elon Musk tweeted several memes yesterday that seemed to indicate that the electric car company may have ended its relationship with the controversial cryptocurrency Bitcoin. Still, the CEO’s cryptic crypto tweets don’t outweigh past statements made by Musk in the past several weeks, including one that indicated Tesla wouldn’t let go of its Bitcoin stash but did it?

In December 2020, Tesla bought $1.5 billion worth of Bitcoin, a Cryptocurrency that gained mainstream notoriety several years ago after an outlandish and meteoric rise to a massive valuation. But, instead of looking at it as a simple investment, Tesla did what Tesla does: made it a statement and refined several of its’ executive’s job titles: Musk became Tesla’s Technoking, and CFO Zachary Kirkhorn assumed the role of “Master of Coin,” two titles that were made official in a filing with the SEC.

Tesla soon started accepting Bitcoin as a payment option for its cars and energy generation and storage products. It was a relatively bold move because while many large retailers and well-known companies accept Bitcoin as a payment option, being able to buy a vehicle with a direct payment to the manufacturer wasn’t overwhelmingly popular, even in 2021.

But soon after the Bitcoin barrage, Tesla backpedaled slightly. Just a few months after deciding to accept Bitcoin as payment, the company suspended this program, citing environmental concerns as the primary reasoning. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a statement on Twitter. “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment.”

Elon Musk: Tesla is suspending Bitcoin payment options until it’s more sustainable

It was estimated at one point that Tesla had nearly doubled its investment thanks to a surge in Bitcoin’s cost. Its $1.5 billion investment had swelled to be worth $2.8 billion, according to some reports. This solidified Tesla’s decision in Musk’s statement that the company would not be letting go of its Bitcoin, pledging to hold on and reintroduce the ability to purchase products “as soon as mining transitions to more sustainable energy.” In addition, musk reassured Twitter followers on May 19th that the company has “Diamond Hands,” a term utilized for someone or something that is prepared to hold a position despite long or short-term volatility. Someone with Diamond Hands is usually someone who, despite setbacks in a stock or crypto’s price, plans to hold their position until an end goal is assumed.

However, June 3rd’s Twitter fiasco from Musk hinted that the company might have gotten rid of its Bitcoin holdings.

Musk is a man known for a comedic sense of humor, a cryptic style of Tweeting, and a sarcastic but fun attitude about his business. If Tesla did sell any of its Bitcoin, it would be a considerable blow to the Crypto’s valuation, especially as this rumor has already circulated through the financial world. Bitcoin has dropped over 6% in the last 24 hours.

What do you think? Let us know in the comments below, or be sure to email me at [email protected] or on Twitter @KlenderJoey.

Did Elon Musk hint that Tesla has broken up with Bitcoin?
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