Tesla $2 Billion Bitcoin Holdings “Liquid Alternative to Cash”

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  • Tesla has announced a $500 million paper profit on its Bitcoin holding
  • The carmaker hasn’t sold any bitcoin since early 2021 and sees it as a “liquid alternative to cash”
  • Tesla caused a stir when it bought, sold, then stopped accepting bitcoin in 2021

Tesla has equated its $2 billion bitcoin holding as a “liquid alternative to cash” as well as an investment, according to its latest filing with the Securities and Exchange Commission (SEC). In its 10-K filing, Tesla revealed a paper profit of $500 million from the Bitcoin position it entered in early 2020, which was revealed in February 2021. The company added that it has not ruled out further purchases, saying that it believed in the “long-term potential of digital assets both as an investment and also as a liquid alternative to cash.”

Tesla Has Chequered Past with Bitcoin

Tesla created a storm of excitement when it announced its $1.5 billion bitcoin purchase last year, helping the value temporarily rocket at the same time, although it undid a lot of this good work when it criticized the environmental impact of Bitcoin mining and stopped accepting it for Tesla sales just weeks later.

Tesla also sold a portion of its Bitcoin position in early 2021, although this was passed off as a liquidity test. It seems to have given the carmaker confidence that it can liquidate its bitcoin effectively at short notice as it has not sold any since, and indeed it seems to have continued confidence in the digital asset market.

Dogecoin Sales Not Included in Filing

The filing didn’t reveal the impact of Tesla’s decision to accept Dogecoin for Tesla merchandise, which surprised many in the crypto space at the time given that it uses the same proof-of-work consensus algorithm as Bitcoin.