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Tesla purchased its first Bitcoin holdings worth approximately $1.5 billion amidst the 2021 crypto bull market.
Tesla Inc (NASDAQ: TSLA) reported its Q1 2023 financials on Thursday, April 19. Interestingly, the electric vehicle behemoth has not touched its Bitcoin (BTC) holding for the last six months. Notably, Tesla reported a Bitcoin holding worth approximately $184 million during the first three months (Q1 2023), similar to the last quarter of 2022. However, the current company’s Bitcoin holdings are a significant drop from last year’s Q1 bag which was worth approximately $1.261 billion.
Tesla sold most of its Bitcoin holdings during the second quarter of 2022 and was left with Bitcoins worth approximately $218 million. The sale of its Bitcoin holdings coincided with last year’s Bitcoin crash fueled by the Terra Luna UST collapse.
The company further reduced its Bitcoin holding in the last quarter of 2022, which coincided with the FTX and Alameda Research implosion.
Tesla and BTC in Q1 2023 and Earlier
In early 2021, Tesla announced the acquisition of Bitcoins worth approximately $1.5 billion. The announcement helped push Bitcoin price above $64k for the first time in 2021. During the same period, the electric vehicle company also announced that it would begin accepting Bitcoin for EV purchases. However, the enthusiasm in the crypto market was short-lived as the company’s push to adopt Bitcoin succumbed to regulatory pressure. Notably, global regulators were concerned with Bitcoin’s heavy consumption of energy through its Proof-of-work (PoW) consensus mechanism. As a result, Tesla through Musk announced that it would suspend accepting Bitcoin as a form of electric vehicle payment until miners reduced their consumption of fossil fuels, especially coal.
Nonetheless, Musk promised Tesla will transition to Bitcoin as a form of payment after miners migrate to more sustainable energy sources. Meanwhile, Musk announced that the company is looking into other cryptocurrencies that use less than 1 percent of energy per transaction.
Since then, Ethereum (ETH), the second-largest digital asset by market capitalization has transitioned from the PoW consensus mechanism to the current PoS through the beacon chain.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Interestingly, Musk’s favorite cryptocurrency Dogecoin is the second largest Proof-of-Work secured blockchain after Bitcoin. According to on-chain data provided by Tokenview, Dogecoin had a total hashrate of approximately 649.44 (TH/s) on Thursday with a mining difficulty of about 9.94 million.
Q1 Financial Highlights
During the first quarter, Tesla reported its total revenue grew by 24 percent YoY to $23.3 billion. The company noted new products are underway including the long-awaited cybertruck.
“We are rapidly growing energy storage production capacity at our Megafactory in Lathrop and we recently announced a new Megafactory in Shanghai. We are also continuing to execute on our product roadmap, including Cybertruck, our next-generation vehicle platform, autonomy, and other AI-enabled products,” Tesla noted.