Tesla Lost $300 Million on Sales of Bitcoin.

Elon Musk's car company has sold off 70% of its Bitcoin holdings so far, but it is being cautious about selling the rest.Tesla declining to "hodl" Bitcoin BTC ticks lower at $41,802 have caused a loss of almost $300 million in potential revenues. Tesla's current approach to investing in bitcoin In February 2021, Tesla made a historic $1.5 billion investment to launch its first entrance into the Bitcoin market. The price of Bitcoin was about $36,000 at the time. Tesla's stock price has decreased by around 40% in comparison to Bitcoin after the initial BTC balance was disclosed on February 8, 2021. Specifically:
BTC vs. TSLA: -40.1%
BTC to USD exchange rate: +7.39%
USD against TSLA: -35.7%


But in an unexpected move, Tesla sold almost 10% of its shares in March 2021. Then, in 2022's second quarter, the business sold about 75% of its reserves of Bitcoin. These sales, as Tesla CEO Elon Musk pointed out, were meant to support Tesla's balance sheet in tumultuous financial times and to show the liquidity of Bitcoin. With the current value of Bitcoin at over $41,500, Tesla might have made a profit of almost $300 million if it had kept its full investment in the cryptocurrency. However, the company's remaining Bitcoin holdings, which are believed to be worth 9,720 BTC, have not changed over the past several quarters, indicating a more cautious attitude in what market observers believe will be a positive year for Bitcoin.

Tesla may not sell the remaining Bitcoin

It's interesting to note that Tesla's earlier Bitcoin sales coincided with periods with lower free cash flows. It is the money left over after a corporation pays for the expenses necessary to keep up or expand its operations. For instance, Tesla's $272 million Bitcoin transaction in the first quarter of 2021 accounted for a startling 93% of the company's free cash flows at that time. Similarly, in Q2 2022, Tesla’s 73% reduction in free cash flows coincided with its Bitcoin sales.To put it plainly, Musk relied on Bitcoin to support his finances when Tesla was experiencing cash flow issues. He might not need to use the same approach right now, though, considering Tesla's projected growth in free cash flows through 2023. For instance, Tesla's free cash flow in Q4 2023 was robust at $2.1 billion, helping the company earn $4.4 billion for the year. A number of analysts predict that the value of Bitcoin will increase in 2024. They attribute their confidence to the US government's approval of spot Bitcoin exchange-traded funds as well as the expected effects of the impending Bitcoin halving event.


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