Musk “Heartbroken” About Bitcoin, Tesla’s Poor Business, Odds of Selling 40,000 Bitcoins Increasing

The situation that Tesla is facing today makes things delicate.

Musk "Heartbroken" About Bitcoin, Tesla's Poor Business, Odds of Selling 40,000 Bitcoins Increasing

Earlier this year, Elon Musk suddenly announced that Tesla had bought $1.5 billion in bitcoin, making the cryptocurrency “out of the loop” to a greater extent. Then, Tesla announced that it would support Bitcoin payments, only to give up in a short period of time because it “consumed too much fossil energy”.

In the meantime, Tesla sold a tenth of its bitcoins (currently holding around 43,000), and after announcing that it would no longer accept bitcoin payments, Musk tweeted this when asked if he had sold the rest of his bitcoins, saying “Tesla has a pair of diamond hands. However, on the 4th Musk tweeted again that he was “heartbroken” about Bitcoin.

“The term “diamond hands” comes from the famous WallStreetBets board on Reddit, which became famous earlier this year for speculating on GameStop stock, causing Wall Street short sellers to blow up their positions, while “diamond hands” is a common term used on the board, meaning never sell.

Therefore, Musk’s “Diamond Hand” tweet means he won’t sell, but such a tweet doesn’t prove that Musk will always hold the coin, especially since he has already sold a tenth of it before. Given that Musk has been repeatedly charged by the SEC for his tweets in recent years and has spent tens of millions of dollars on settlements, it’s clear that Musk can’t tweet a clear explanation of his actions (whether he’s buying or selling bitcoin) before he does so in order to avoid suspicions of “market manipulation.

The situation that Tesla is facing today makes things a bit more delicate. For cryptocurrency investors, the best news they can get today is instead that Musk has sold Bitcoin, which makes it possible to get the price of the currency out of Musk’s hands in the future so as not to have a situation where Musk sends a tweet and the price of the currency drops by a fraction of a percent (the heartbreak emoji on the 4th caused another sudden 2% drop in Bitcoin).

If Tesla doesn’t sell the rest of its coins, investors in cryptocurrencies need to be wary of a potential “Tesla double kill”. This is because as Tesla’s stock price falls, the probability of it selling bitcoin may increase.

Tesla Financially Needs to Sell Bitcoin
Today, Tesla’s stock is trading at less than $600, down a third from its all-time high of $900 at the end of January. The huge loss in market cap has caused Musk to fall from his position as the world’s richest man, and the price of bitcoin is now down more than a third from its high this year.

What’s more troubling is that the price of bitcoin is now close to the cost price Tesla bought it at, and if the price continues to fall, it will instead become a financial burden for Tesla, so it makes sense for Tesla to dump the baggage when the price has not yet fallen below its buying cost.

Bitcoin is not good for Tesla’s carbon business
Since its inception, Tesla’s car business has not been profitable, and its profits have come mainly from selling shares of carbon emissions. The debate over the environmental impact of bitcoin has intensified this year, and while opinions still differ on the actual environmental impact of bitcoin mining, for a company like Tesla, whose main source of profit is trading carbon emissions, holding an asset with as much environmental controversy as bitcoin is certainly not conducive to its current business model. It is this same consideration that led Tesla Motors to stop accepting bitcoin payments previously.

In its 2020 earnings report, Tesla reported its first annual profit ($721 million), with the sale of carbon credits bringing in $1.58 billion, more than twice the net profit. The sale of carbon credits earned a record $518 million in revenue in the first quarter of this year, far exceeding the revenue from the sale of bitcoin.

Tesla’s business situation is worrying. Public opinion crisis in China market
If you look at Tesla’s past sales figures, you can see that it tends to “sprint” its sales in the last month of each quarter, which not only makes the quarterly report look better, but also leaves more room for the market’s imagination. However, this June is a bit of a problem for Tesla.

First of all, the Chinese market is the most important market for Tesla other than the U.S. mainland, but due to the rights of female owners in April this year, Tesla’s sales in China dropped sharply in May, selling only a few thousand units in the country. After the continued fermentation in May, Tesla’s sales in China may be even worse in June.

In the overseas market, due to the seat belt problem, Tesla, on the other hand, newly announced the recall of 5530 Model 3 and Model Y cars, which is equivalent to the Tesla sales in all of China in May. It is conceivable that this June, Tesla’s sales figures will not look good, and if it still wants to deliver a financial statement, selling coins is likely to be Musk’s choice.

Tesla’s global sales in May, and the trend of the currency price. If the price of the currency continues to rise, perhaps Musk will not sell, but if the Tesla sales data released this month by the Federation is unimpressive, I’m afraid Musk is likely to choose to “throw the pawn to save the car.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/musk-heartbroken-about-bitcoin-teslas-poor-business-odds-of-selling-40000-bitcoins-increasing/
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