This December 5, 2024, Tesla could have earned an additional $3 billion if it had held on to its bitcoins instead of selling them at $31,000. As of 2021, Tesla had invested $1.5 billion in bitcoin, purchasing approximately 39,474 BTC at an average price of $38,000 per token. However, in July 2022, the company sold 75% of its bitcoin holdings, reducing its total to approximately 9,868 BTC.
Tesla misses $3 billion by selling bitcoin at $31,000
By July 2022, when Tesla sold 75% of its BTC holdings, the crypto's price had fallen to around $18,900. If Tesla had kept its entire initial investment, the value would have exceeded $4 billion! Because currently with bitcoin hitting $102,000, Tesla's remaining holdings are only worth about $1 billion.
This sale allowed Tesla to recoup about $936 million, but at an average sale price of $31,615, well below the original purchase price. If Tesla had held on to its bitcoins, the value of its holdings would have increased significantly with the recent rise in the price of BTC.
A decision influenced by the environmental impact of BTC mining
Tesla's decision to sell a large portion of its bitcoins came amid growing concerns about the environmental impact of bitcoin mining. Tesla CEO Elon Musk announced in May 2021 that the company would no longer accept bitcoin as payment for its vehicles, citing environmental concerns. This announcement caused the price of BTC to drop significantly, from $56,000 to $49,400 in a single day.
Tesla's premature bitcoin sale highlights the challenges of managing crypto assets. By missing a $3 billion opportunity, Tesla is reminding investors of the importance of patience and strategy in a volatile and ever-changing market.
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