Matt Levine: Tesla Sold Some Bitcoins

Matt Levine: Tesla Sold Some Bitcoins, as well as the deli, the first tax law, a JPMorgan Bitcoin fund, and Dogecoin versus lottery tickets. Mr. Levine: There’s a lingering suspicion that it’s unethical to buy something, say you like it, and then sell some of it. Tesla sold 10% of its holdings primarily to demonstrate Bitcoin’s liquidity as an alternative to holding cash on the balance sheet, he claims. On the earnings call, Chief Financial Officer Zachary Kirkhorn stated, “We’ve been quite pleased with how much liquidity there is in the Bitcoin market.” “Do people want to be upset about this?” Levine wonders. “I suppose it wanted to make sure its money wasn’t trapped. That is a valid concern!”

Elon Musk purchased Bitcoin, sold it when the price rose, and then tweeted about it. David Wheeler: There’s no evidence that Tesla or Musk lied about anything. Wheeler: It’s a great business if you can buy something secretly, announce “I own the thing,” and then sell it secretly. Tesla purchased approximately $34,700 per Bitcoin in late January and early February, and sold approximately $272 million, he claims. That’s an extra $101 million in real US dollars that came in from profitably selling Bitcoin.

In the first quarter of 2021, Tesla made $1 billion on Bitcoin. Aaron Schiller: Because the majority of those gains were unrealized, they do not count for accounting purposes. He claims Tesla has $900 million in unrealized Bitcoin profit that it could cash in at any time. Schiller claims that moving the price of cryptocurrency with his tweets is simple and profitable.

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