Tesla CEO Elon Musk stated that the company sold 10% of its Bitcoin holdings to demonstrate the liquidity of the cryptocurrency, adding that he has retained his personal investment in it. A Tesla earnings report showed that the company, which purchased Bitcoin for $1.5 billion earlier this year, generated $101 million in revenue from the sale. Musk mentioned on Twitter that Tesla was essentially trying to "prove Bitcoin's liquidity as an alternative to holding cash on the balance sheet."
As of 12:41 AM London time, the world's largest cryptocurrency rose by 2.46% to reach $55,369. While many still view cryptocurrency as a very high-risk investment that cannot be compared to cash, Tesla's CFO Zachary Kirkhorn stated in the earnings call that the company "believes in the long-term value of Bitcoin."
For several strategists, Bitcoin and other cryptocurrencies are seen purely as speculative investments and not legitimate alternatives to cash. For example, BCA Research argues that Bitcoin fails as a store of value or unit of account due to its volatility, despite these being essential functions of money.
However, Musk has been a strong advocate for cryptocurrencies for some time, announcing late last month that Tesla would begin accepting Bitcoin as payment for its vehicles. Tesla's stock fell by 3.1% in late trading after the announcement of its earnings on Monday, despite reporting record profits in the first quarter.
