Tesla selling Bitcoin last year turned out to be a $500M mistake

The terms of Bitcoin (BTC) has grown by much than 50% since Tesla unveiled its astir $1 cardinal BTC income successful July 2022.

Are Tesla's Bitcoin trades profitable? 

Tesla infamously dumped astir $936 cardinal of its full Bitcoin holdings successful Q2/2022, accounting for 75% of its remaining reserves, to unafraid a $64 cardinal profit. At the time, Bitcoin was trading astir 70% little than its grounds precocious of $69,000 successful November 2021.

BTC/USD monthly terms illustration featuring Tesla's Bitcoin income purchases and sales. Source: TradingView

Originally, Tesla purchased $1.50 cardinal worthy of Bitcoin successful February 2021 astatine an mean terms of $36,000. The institution past sold BTC worthy $272 cardinal to boost its Q1/2021 accounting by $101 million.

The institution has nevertheless held connected to its remaining BTC as of Q4 2022 despite the terms of Bitcoin sitting astatine bear-market lows of astir $16,000 astatine the time. Today, Tesla holds 10,725 BTC worthy astir $330 million, astir 15% beneath the procurement worth from February 2021.

Overall, Tesla made astir $165 cardinal successful nett from 2 abstracted Bitcoin sales. As of April 14, it sits atop an unrealized nonaccomplishment of astir $56.6 cardinal connected its remaining BTC holdings. While its nett net to day sits astatine astir $108 million. 

Will Tesla dump remaining BTC holdings?

Interestingly, Tesla's erstwhile Bitcoin income came from weaker escaped currency flows. For instance, the Q1/2021's BTC merchantability worthy $272 cardinal made up astir 93% of Tesla's escaped currency flows successful the aforesaid quarter.

Tesla escaped currency flows show by quarter. Source: Statista

Similarly, Tesla's Bitcoin income successful Q2/2022 came arsenic its escaped currency flows declined 73% versus the erstwhile quarter. Both income suggest that Musk relied connected Bitcoin arsenic a haven during Tesla's currency crunch phases.

The Tesla CEO explained astatine the clip that the merchantability was made to “prove liquidity of Bitcoin arsenic an alternate to holding currency connected a equilibrium sheet.”

Meanwhile, Wall Street analysts estimate that Tesla's escaped currency travel successful Q1/2023 would beryllium astir $2 billion, up 40% versus the erstwhile quarter. This should trim the chances of Tesla dumping immoderate important Bitcoin magnitude successful the adjacent term.

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