Earlier this year, Elon Musk suddenly announced that Tesla had bought $1.5 billion in Bitcoin, making cryptocurrencies “out of the circle” to a greater extent. After all, as the richest man, Musk has extraordinary appeal and influence. force. Subsequently, Tesla announced its support for Bitcoin payments, but gave up in a short period of time because of “consuming too much fossil energy”.
During this period, Tesla sold one-tenth of the bitcoins (currently holding about 43,000 bitcoins), and after announcing that it would no longer accept bitcoins for payment, when asked whether he had sold the remaining bitcoins Musk sent such a tweet when he was downloading Bitcoin, saying “[Tesla has a pair of diamond hands](1)”. However, on the 4th, Musk tweeted again, saying that he had “heartbroken” about Bitcoin.
The term “Diamond Hand” comes from the famous “Wall Street Gambler” (WallStreetBets) section on Reddit. Earlier this year, “Wall Street Gamblers” hyped up “GameStop” stocks and made Wall Street shorts famous for their liquidity. And “diamond hand” is a common term in this forum, which means never sell.
Therefore, the meaning of Musk’s “Diamond Hand” tweet is that he will not sell, but such a tweet does not prove that Musk will always hold coins, especially since he has sold one-tenth of the coins before. Considering that in recent years Musk has been repeatedly accused by the SEC for tweeting and spent tens of millions of dollars in settlements, in order to avoid the suspicion of “operating the market,” it is obvious that Musk cannot be operated before (regardless of buying or selling bits). Currency) give clear instructions on Twitter.
The situation facing Tesla now makes things more subtle. For cryptocurrency investors, the best news available today is that Musk has sold Bitcoin. This will free the currency price from Musk’s influence as much as possible in the future, so as to prevent Musk’s tweet from making the currency. The situation where the price dropped by a fraction (the heartbreak expression on the 4th caused Bitcoin to suddenly drop by 2%).
If Tesla does not sell the remaining coins, as an investor in cryptocurrency, you need to be wary of potential “Tesla double kills.” Because with the decline in Tesla’s share price, the probability of it selling Bitcoin may increase.
Tesla financially needs to sell Bitcoin
Today, Tesla’s stock price is less than $600, which has fallen by one-third from its historical height of $900 at the end of January. The huge loss in market value has made Musk fall from the throne of the world’s richest man, and now Bitcoin The price of Tesla has also fallen by more than one-third from this year’s high. From this point of view, Tesla holds Bitcoin and cannot hedge its own stock price.
What’s more troublesome is that the price of Bitcoin is now close to the cost price when Tesla bought it. If the price of the currency continues to fall, it will become a financial burden for Tesla. Therefore, Tesla has a reason for the price of the currency. Get rid of this burden before it falls below its purchase cost.
Bitcoin is bad for Tesla’s carbon business
Since its establishment, Tesla’s automotive business has not made any money. Its profit mainly comes from the sale of carbon emissions. Since the beginning of this year, the debate on the environmental impact of Bitcoin has become increasingly fierce. Although people from all walks of life still have different views on the actual impact of Bitcoin mining on the environment, for a company like Tesla that uses trading carbon emissions as its main source of profit In terms of holding Bitcoin, an asset with huge environmental controversy, it is undoubtedly not conducive to its current business model. It is based on this consideration that Tesla Motors stopped accepting Bitcoin payments before.
In the 2020 financial report, Tesla achieved annual profit for the first time (US$721 million), of which the sales of carbon credits brought in revenue of US$1.58 billion, more than twice the net profit. In the first quarter of this year, the sale of carbon credits earned a record revenue of US$518 million, far exceeding the revenue from selling Bitcoin.
Tesla’s operating conditions worry about the crisis of public opinion in the Chinese market
Studying Tesla’s previous sales data, we can find that it often “sprints” sales in the last month of each quarter, which not only makes the quarterly report better, but also leaves more room for imagination in the market. However, this June is a bit troublesome for Tesla.
The first is the Chinese market. The Chinese market is Tesla’s most important market outside of the United States. However, due to the rights protection of female car owners in April this year, Tesla’s sales in China fell sharply in May, and only a few thousand vehicles were sold in China. . After continuous fermentation in May, China’s Tesla sales may be even worse in June.
In overseas markets, due to seat belt problems, Tesla recently announced the recall of  (2) Model 3 and Model Y cars, which is equivalent to the total sales of Tesla in China in May. It is conceivable that Tesla’s sales data will not look good this June. If you still want to hand over a financial statement, selling coins is likely to become Musk’s choice.
Tesla’s global sales in May, and the trend of currency prices. If the currency price continues to rise, maybe Musk will not sell it, but if the Tesla sales data announced by the Federation of Travellers this month is unsightly, I’m afraid Musk may choose to “lost his pawn and protect his car.”
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.