Elon Musk confirmed in the early hours of Monday that Tesla has not sold any of its Bitcoin holdings, in a tweet that sent the value of the cryptocurrency soaring – hours after he caused it to plummet by hinting he had sold.
The South African billionaire has a history of provocative tweets about the markets, which have landed him in hot water with the Securities and Exchange Commission (SEC) and earnt him a $20 million fine.
Tesla bought about $1.5 billion worth of Bitcoin back in February, around the time it announced it would accept the cryptocurrency as payment for its products. However, it was revealed earlier this week that the company sold off about $272 million in Bitcoin during Q1 of this year.
On Sunday he suggested in a cryptic tweet that Tesla could have dumped the remainder of its Bitcoin holdings.
But in the early hours of Monday, he tweeted: ‘To clarify speculation, Tesla has not sold any Bitcoin.’
Elon Musk on Monday confirmed that Tesla had not sold the remainder of its Bitcoin holdings
Musk’s 1:56am tweet sent the value of Bitcoin rocketing from $42,475 to $44,831 in 15 minutes
One Bitcoin was worth $42,475 in the minutes before his tweet – the first time it was worth less than $45,000 in three months.
Fifteen minutes later, it was worth $44,831.
On Wednesday, Tesla had announced that it would no longer accept Bitcoin as payment, citing environmental concerns.
That announcement caused the value of Bitcoin to drop dramatically.
The cryptocurrency was selling for around $56,000 on Wednesday morning. As of Monday morning 9am ET, its price was $46,000, according to CoinDesk.
The billionaire responded Sunday afternoon to a Twitter account which wrote: ‘Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him’
Musk cryptically replied: ‘Indeed’.
Musk has for several years enjoyed toying with speculators on Twitter
The billionaire responded Sunday afternoon to a Twitter account which claimed he would be selling off all Bitcoin holdings
The cryptocurrency was selling for around $56,000 on Wednesday morning. As of Sunday afternoon, its price is $45,300, according to Google data.
Tesla still has more than $1.2 billion worth of Bitcoin, according to calculations based on its most recent earnings statements.
The company sold off hundreds of millions of dollars worth of the cryptocurrency in the first business quarter of 2021, reportedly making up 23 per cent of Tesla’s earnings for that three month period.
Had it not been for the sale of its Bitcoin, the company would have missed out on its earning target for the quarter, NYU business professor Scott Galloway wrote on Twitter on Friday.
Bitcoin, the world’s biggest digital currency, has surged five-fold in the past year alone.
The rise comes amid an increasingly fraught debate over the environmental costs of the world’s most popular cryptocurrency.
Crypto is ‘mined’ by high-powered computers that require huge amounts of energy to continuously solve computational math puzzles. With each solved problem, a certain amount of coin is produced.
While the machines use electricity, fossil fuel is a major category in electricity generation.
Environmentalists argue that the creation of the cryptocurrency may harm efforts to limit global warming.
The South African-born billionaire admitted on SNL that cryptocurrency was ‘a hustle’
The company sold off hundreds of millions of dollars worth of the cryptocurrency in the first business quarter of 2021, reportedly making up 23 per cent of Tesla’s earnings for that three month period, as tweeted by NYU business professor Scott Galloway
On Wednesday, Tesla also announced that it would no longer accept Bitcoin as payment, citing environmental concerns
The rising price of Bitcoin in the last two years has resulted in carbon emissions increasing by more than 40 million tons, a BofA Securities report said. That rise is the equivalent of 8.9 million additional cars on the road.
That same reported noted Bitcoin’s energy consumption is comparable to that of major US corporations like American Airlines or even the US government.
Bitcoin also consumes more electricity than many countries.
It consumes almost the same amount of electricity annually as Egypt, according to an index compiled by the University of Cambridge that cites 2019 data from the US Energy Information Administration.
Musk tweeted a link to that study on Thursday, saying: ‘Energy usage trend over past few months is insane.’
He later tweeted: ‘To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.’
Pictured: A graph showing data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) that shows the energy consumed by Bitcoin. Consumption increased to its highest ever levels towards the end of last year, with the rates continuing to rise into 2021.
Tesla is now eager to distance itself from Bitcoin because of its harmful effects on the environment
This week’s tweets about Bitcoin are not the first time that Musk has manipulated the stock market with his Twitter account.
Back in January, the Tesla founder added the word ‘#bitcoin’ to his Twitter bio prompting the price of the cryptocurrency to soar.
The billionaire is an extremely influential figure on Twitter, where he is followed by 43.8 million users.
However, he has a record of making market-moving comments on the site, which have caused widespread criticism and led him into legal trouble.
Back in August 2018, Musk shared a tweet claiming that he had ‘funding secured’ to take Tesla private at $420 a share. It sent the company’s stock soaring and forced a halt in trading.
Musk reportedly gained $851 million in the wake of posting that tweet.
The Securities and Exchange Commission (SEC) sued Musk for fraud for ‘false and misleading tweets’ claiming he simply chose the $420 price because the number is a marijuana reference which would ‘amuse’ his girlfriend.
Musk was fined $20 million and was forced to resign as chairman of Tesla after reaching a settlement with the Commission.
Later that year, Musk and the SEC subsequently reached a separate deal which required the the billionaire to have tweets about certain topic pre-approved by an experienced securities lawyer.
He must now not tweet out information about Tesla’s financial condition, potential or proposed merger, production numbers or sales, or new or proposed business lines’ for fear it could manipulate the market.
Back in January, the Tesla founder added the word ‘#bitcoin’ to his Twitter bio prompting the price of the cryptocurrency to soar