Tesla Holds onto Bitcoin Despite Revenue Dip
Despite experiencing a 15% decrease in revenue during the first quarter, Tesla has chosen to maintain its Bitcoin holdings. The company currently owns 9,720 BTC, which is valued at $645 million. Similarly, Elon Musk’s other company, SpaceX, holds 8,290 BTC worth $550 million, indicating Musk’s continued confidence in the leading cryptocurrency.
Tesla recently released its financial results for the first quarter, revealing a 9% decline in revenue, the largest drop in 12 years. Despite this setback, Elon Musk has chosen to retain his trust in Bitcoin, as the company did not sell any of its BTC during Q1.
As the world’s largest electric vehicle manufacturer, Tesla generated $21.30 billion in revenue during the first quarter, falling short of analyst predictions of $22.15 billion. This figure also represents a significant decline from the $25.17 billion recorded in the previous quarter and the $23.33 billion generated in the first quarter of last year.
The decrease in revenue reflects challenging times for Tesla, as it faces increased competition from established automakers in the electric vehicle market and struggles to maintain its hold on the Asian market. Tesla’s difficulties have also led to the recent layoff of 14,000 employees, which accounts for 10% of its global workforce. Bloomberg reports that this number could potentially double in the near future.
Tesla’s stock has also experienced a decline over the past four months, with a year-to-date loss of over 34%. The stock price has dropped from $248 to its current value of $162.40.
Despite these challenges, Tesla has remained steadfast in its Bitcoin holdings. The company’s stash of 9,720 BTC remained unchanged throughout the third and fourth quarters of last year. In its latest earnings report, Tesla confirmed that it continues to hold this Bitcoin, which is currently valued at $647 million.
In early 2021, Tesla made a groundbreaking move by acquiring $1.5 billion worth of Bitcoin, giving the cryptocurrency much-needed credibility and mainstream appeal. The company stated that this purchase would provide it with greater flexibility to diversify its assets and maximize returns on its cash.
At the time of the Bitcoin purchase, the cryptocurrency was trading at $38,800. Just two months later, it reached a high of $60,000. To take advantage of the price surge, Musk sold 10% of the BTC for $272 million. However, Tesla later sold off most of its Bitcoin, and by the end of the second quarter, the company only held $218 million worth of the cryptocurrency.
Since then, the value of Bitcoin has skyrocketed from $21,000 to surpass $70,000, providing Tesla with a much-needed boost to its assets.
Currently, Bitcoin is trading at $66,485, experiencing a slight increase over the past day despite a dip in trading volume to $23.7 billion.
Alex Kuptsikevich, an analyst at FXPro, commented on Bitcoin’s movement in the past 24 hours, stating that it is avoiding significant fluctuations and remaining within the range of the previous day. He also noted that Bitcoin seems to be cautiously testing the 50-day moving average, but has yet to surpass it for the third consecutive day.
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