This is the story of two Bitcoin giants who decided to make very different decisions in the second half of the year 2022, which affects their companies and their top management.
Tesla sells its Bitcoin a lot
Although a large part of the crypto community respected Elon Musk, first for his positions on bitcoin and then mostly for his numerous tweets and declarations of the potential of dogecoin, the Tesla boss suddenly decided about 75% of his bitcoins to sell. in the second half of 2022. Adding $936 million in cash to the company’s accounts.
As a reminder, Tesla strongly embraced bitcoin in 2021, investing $1.5 billion when Elon Musk realized 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 sparked a renewed interest in cryptocurrency, and bitcoin reached new highs in 2021. Tesla benefited directly, as it locked in over $100 million in profits on its cryptocurrency investment.
However, Tesla suspended the sale 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, sales in dogecoin are still available, including the famous Tesla carafe for 2450 DOGE.
Tesla does not claim to be completely anti-bitcoin
To justify this action, Tesla’s profitability for the past several months has been affected by ” bitcoin depreciation“, he revealed in his second quarter financial summary.
It is the logic that turned on the economic situation of the world that the boss of Tesla announced that he had sold his crypto: Sell bitcoins at Tesla ” It should not be taken as a verdict on the BCT. It’s just that we were concerned about the overall liquidity of the company in light of the shutdown in China.” said Musk.
” We are definitely open to increasing our bitcoin holdings in the future.“Mr. Musk said on an earnings conference call with analysts on Wednesday. But Tesla’s CEO, who has at times been one of cryptocurrency’s strongest proponents, has downplayed the role of digital assets in Tesla’s business. Tesla’s main goal is to accelerate the transition to renewable energy, making cryptocurrency a “side hustle” it’s not something we think about much” said Musk.
During an earnings conference call on Wednesday, Tesla CFO Zachary Kirkhorn said the company sold bitcoin for “realized gain.” Which means Tesla sold the bitcoin at a higher price than he paid. However, he also admitted that the remaining 25% of bitcoins are worth much less than their purchase values.
microstrategy maintains a pro-BTC position
Despite the recent strong changes in the king of cryptocurrencies, Microstrategy continues to invest in this asset and its CEO Michael Saylor remains one of the strongest defenders of the first signal.
In the second half of 2022, Microstrategy bought 481 million bitcoins for $10 million in the depth 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, and remain executive chairman. He will also continue to serve on the bitcoin mining council, a global forum of miners dedicated to advancing the BTC network. Phong Le, the company’s chairman, will take on the role of CEO.
” We are still early in the adoption cycle for digital assets, and Bitcoin in general, there is clearly a 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 to earnings, primarily related to the declining value of bitcoin.
” First, A) a digital asset to serve as a long-term store of value, B) a digital commodity to act as a trading alternative to energy, metals and other physical commodities, C) an open, neutral, fast and free digital payments network for everyone. »
An ultra-exposed position towards bitcoin
Microstrategy is overexposed to bitcoin. In fact, Microstrategy has become a means of shorting bitcoin and gaining exposure: 51% of the company’s available shares are currently short.
MicroStrategy released quarterly results below Wall Street estimates, with revenue of $122.1 million versus $126 million expected. Losses for the quarter totaled $918.1 million, of which $917.8 million was attributable to the company’s bitcoin holdings.
Since first buying bitcoin in the third quarter of 2020, MicroStrategy has invested over $4 billion in cash. To do this, she issued corporate debt, convertible bonds, stocks and got 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, corresponding to an average cost per bitcoin of approximately $30,664 and a market price of $18,895.02 per bitcoin.
Tesla and MicroStrategy therefore take very different strategic decisions and their respective CEOs keep an interest in bitcoin, but for Musk this asset remains secondary when Saylor considers it necessary.
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Alexis Patin
Observer of the monetary, economic and social revolution.
