Tesla has officially declared that it has sold some of its bitcoin.
In February, it said it had invested $1.5 billion to buy bitcoin, but without disclosing the purchase price.
Now in its Q1 2021 Update, the company reveals that it sold bitcoin during the first quarter of the year grossing $272 million, with a profit of $101 million.
Therefore of the 1.5 billion purchased, 0.171 were sold, or just over 10%.
The gain from this sale is about 60% of the invested capital, achieved in less than two months after the purchase, while almost 90% of the bitcoin purchased were not sold in the first quarter of the year.
In light of this information, it is plausible to imagine that the purchase was made at a price between $34,000 and $40,000, probably between late January and early February, and that the sale could have been made in mid-March at a price between $55,000 and $61,000.
According to the company’s CFO, Zachary Kirkhorn, Tesla’s decision to invest in bitcoin was due to the search for a good asset on which to park some of the company’s liquidity, and that this choice has turned out to be very good.
Tesla sold bitcoin: the strategy
Kirkhorn also revealed that they intend to hold on to most of the bitcoin purchased over the long term and that one of the goals of this investment was to generate some return in the short to medium term.
This is therefore a two-pronged investment strategy, aimed on the one hand at generating short to medium-term returns on a minority of the investment, and on the other hand at the long-term preservation of the bulk of the BTC held.
However, it is not known how the company performed in April, when the price surpassed the $61,000 level reached in March, only to fall to below $48,000. In light of what it did in the first quarter, it is possible to imagine that Tesla may have made some transactions on the bitcoin market in April, either by monetizing another slice of the bitcoin it bought in February at a price below $40,000 or by buying more bitcoin when the price fell below $48,000.
What is certain, however, is that the management of this investment is not as trivial as that of MicroStrategy, for example, which buys without ever selling, but follows a logic that takes into account both short-term fluctuations and long-term potential.