The institutional waltz against Bitcoin (BTC)

This is the story of two Bitcoin giants who decided to make radically different decisions in the second half of this year 2022, affecting their companies and their top management.

Tesla sells its Bitcoin massively

While Elon Musk was revered by a very large part of the crypto community, initially for his positions on bitcoin and then largely for his numerous tweets and declarations on the potential of dogecoin, the boss of Tesla suddenly decided to sell around 75% of its bitcoins in the second half of 2022. Adding $936 million in cash to the company’s accounts.

As a reminder, Tesla embraced bitcoin aggressively in 2021, investing $1.5 billion as Elon Musk touted bitcoin’s advantages over standard fiat currency. For part of the year, Tesla customers were able to buy cars using bitcoins.

The automaker’s moves have sparked renewed interest in cryptocurrencies, with bitcoin hitting highs in 2021. Tesla has directly benefited, as it locked in more than $100 million in profits on its cryptocurrency investment .

However, Tesla suspended sales of Bitcoin vehicles in May 2021, citing the environmental impact of the heavy use of coal and other fossil fuels to mine the cryptocurrency. However, dogecoin sales are still available, including the famous Tesla carafe for 2450 DOGE.

Tesla Musk Dogecoin Bitcoin

Tesla does not claim to be entirely anti-bitcoin

To justify this act, Tesla’s profitability for several months has been affected by a ” depreciation of bitcoin“, it indicated in its financial summary of the second quarter.

It is in a logic turned on the world economic situation that the boss of Tesla announced to have sold his crypto: The sale of bitcoins by Tesla ” should not be taken as a verdict on the BCT. It’s just that we were concerned about the company’s overall liquidity given the shutdowns in China.“said Musk.

We are certainly open to increasing our bitcoin holdings in the future.“Mr. Musk said on an earnings conference call with analysts on Wednesday. But the Tesla CEO, who has at times been one of cryptocurrency’s strongest advocates, has played down the role of digital assets in Tesla’s business. Tesla’s main goal is to accelerate the transition to renewable energy, which makes cryptocurrency a “side attraction”, and ” not something we think about a lot“said Musk.

During Wednesday’s earnings conference call, Tesla CFO Zachary Kirkhorn said the company sold bitcoin for “a realized gain.” Which means that Tesla sold the bitcoin for a higher price than it paid. However, he also admitted that the remaining 25% of bitcoins are worth far less than their purchase values.

Microstrategy maintains a pro-BTC stance

Despite the recent strong variations of the king of cryptocurrencies, Microstrategy continues to invest in this asset and its CEO Michael Saylor remains one of the most fervent defenders of the first token.

In the second half of 2022, Microstrategy bought 481 million bitcoins for $10 million in the depths of what is known as crypto winter.

The company also announced that its CEO, Michael Saylor, will step down after 30 years at the helm of the company, while remaining executive chairman. He will also continue to serve on the bitcoin mining council, a global forum of miners aimed at promoting the BTC network. Phong Le, the company’s chairman, will take over the role of CEO.

We are still early in the adoption cycle of digital assets, and Bitcoin in general, there is clearly strong demand around the world, for a number of things.“Saylor said on a conference call to discuss second-quarter results, which included a $918 million impairment charge on earnings, largely related to bitcoin’s declining value.

First, A) a digital property to serve as a long-term store of value asset, B) a digital commodity to serve as a trading alternative to energy, metals, and other physical commodities, C ) a digital payments network that is open, neutral, fast and free for everyone. »

Michael Saylor is no longer CEO of MicroStrategy Bitcoin

An ultra-exposed position towards bitcoin

Microstrategy finds itself in a situation of overexposure to bitcoin. Indeed, Microstrategy has also become a means of shorting bitcoin and gaining exposure: 51% of the company’s available shares are currently shorted.

MicroStrategy released quarterly results below Wall Street estimates, with revenue of $122.1 million versus $126 million expected. Losses for the quarter were $918.1 million, of which $917.8 million was attributable to the company’s bitcoin holdings.

Since first purchasing bitcoin in the third quarter of 2020, MicroStrategy has invested over $4 billion in cryptocurrency. To do this, she issued corporate debt, convertible bonds, stocks and took out a loan with some of her bitcoins.

The initial cost base and market value of MicroStrategy’s bitcoins were $3.977 billion and $2.451 billion, respectively, which corresponds to an average cost per bitcoin of approximately $30,664 and a market price per bitcoin of $18,895.02.

Tesla and MicroStrategy therefore adopt very different strategic decisions and their respective CEOs maintain an interest in bitcoin, but for Musk this asset remains secondary where Saylor considers it essential.

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