Why Did Elon Musk-Owned Tesla Sell 10 Percent of Its Bitcoins?

This moves comes after Bitcoin fell nearly 4 percent on Friday, 23 April, and dropped 23% from an all-time high.

Tesla sold 10 percent of its Bitcoin holdings on Tuesday, it sparked a debate across social media platforms.

(File photo: IANS)

After Elon Musk-owned Tesla sold 10 percent of its Bitcoin holdings on Tuesday, 27 April, many Bitcoin believers alleged that Elon Musk has pumped the cryptocurrency and then sold it to make a fortune.

This moves comes after Bitcoin fell nearly 4 percent on Friday, 23 April, and dropped 23 percent from its all-time high.

In February, Bitcoin prices hit a new record after Tesla, Inc revealed that has it invested 1.5 billion dollars in the cryptocurrency and will be soon accepting Bitcoin as a mode of payment for buying Tesla cars.

“Am I understanding this correctly? Elon Musk buys bitcoin. Then pumps it. It goes up. Then he dumps it and makes a fortune,” Dave Portnoy, an American Internet celebrity blogger asked in a tweet.

Elon Musk Clarifies

Musk clarified that he has not sold any of his personal Bitcoin holdings. "Tesla sold 10 percent of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on the balance sheet while I have retained my personal Bitcoin investment," said Musk.

Musk wanted to prove that Bitcoin can easily be brought and sold without substantially impacting the stock price.

'74 Percent Growth in 2021': Tesla

Tesla Inc reported 74 percent growth after investing in Bitcoin, revealed Tesla's financial report 2020-2021.

According to the company's latest quarterly earnings, Tesla witnessed a great impact from sales of Bitcoin during the first quarter of 2021, generating net proceeds of $272 million just from the recent cryptocurrency sale.

Zachary Kirkhorn, Chief Financial Officer, Tesla said,“In some years we may grow faster, which we expect to be the case in 2021. The rate of growth will depend on our equipment capacity, operational efficiency and capacity and stability of the supply chain."

The company in a filing with the US Securities and Exchange Commission in February said that it bought the bitcoin for more flexibility to further diversify and maximize returns on its cash.