Bitcoin is “a liquid alternative to cash”, according to Elon Musk

Bitcoin is “a liquid alternative to cash”, according to Elon Musk

In a recent filing with the SEC, Tesla explained the liquidity use case of Bitcoin while outlining the “long term potential” which has the first of the cryptocurrencies, which today holds the majority of the crypto market capitalization globally. Tesla has been through a difficult path, from the purchase of bitcoin to its acceptance as a means of payment and its subsequent elimination as a payment method for environmental reasons. Tesla has also entered the bitcoin mining space more recently and released his views on crypto assets a few days ago.

Tesla pronounces on Bitcoin and cryptocurrencies

In a recent filing with the US Securities and Exchange Commission (SEC), Tesla Inc. reiterated its position in favor of bitcoin stating that it haslong term potential” And it is “a liquid alternative to cash“.

The presentation also confirmed that the electric car manufacturer he did not sell any of his bitcoin holdings from the previous quarter and maintain the hold on the asset.

During the first quarter of 2021, Tesla invested a total of $1.5 billion in bitcoin, according to an SEC filing at the time. Within that presentation, Tesla provided information explaining how the investment “would provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity“.

Tesla also declared his intentions to accept bitcoin as a means of payment of goods and services in the future in the presentation of the first quarter of 2021. The news of the investment spread throughout the media and Elon Musk, the CEO of the company, became more active in discussions related to bitcoin.

Bitcoin liquidity from Elon Musk’s point of view

On April 26, 2021, the initial investment to obtain liquidity was reinforced when Musk took to Twitter to defend Tesla’s decision to sell 10% of your bitcoin holdings during the second quarter of 2021 declaring the following:

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Tesla sold 10% of his holdings essentially to test the liquidity of Bitcoin as an alternative to keeping cash on the balance sheet.“.

The filing with the SEC that makes reference to said sale It gave Tesla a profit of 128 million dollars.. However, on June 13, 2021, Musk capitulated to market environmental concerns by stating that bitcoin needed to use more clean energy, thus removing the option of receiving bitcoin as payment until there was verifiable information showing “confirmation of reasonable use (~50%) of clean energy by miners with a positive future trend“, said.

On October 14, 2021, it was reported that Tesla had raised over $1 billion in its initial investment in bitcoin. Most recently, on April 8, 2022, Tesla announced a partnership with BlockStream and Block, noting that Tesla’s energy equipment would be leveraged for a $12 million bitcoin mining facility.

Coming full circle, Tesla entered the bitcoin ecosystem with a massive $1.5 billion BTC purchase, took action for the environment as he believed was necessary, maintained his BTC reserves, and returned to the ecosystem as a clean participant in the bitcoin mining. This point of view is favorable for bitcoin, Ethereum and the other cryptos by the multinational of electric vehicles.

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