Tesla sold 75% of its Bitcoin holdings at a loss, according to community surveys about the period in which the company sold its position. For many, Elon Musk was a “lettuce hand” when he left his position, a term used by long-term holders to indicate that a person is not firm in their convictions.
In terms of market value, Tesla is one of the largest companies in the world, ranking among the top ten and valued at US$ 770 billion. However, with a crisis installed in the world, with high inflation, several companies are taking drastic measures to ensure survival in a scenario of adversity.
A measure that has been common is the search for assets that protect investors from inflation in fiat currency, this being perhaps the most controversial point of the sale of Tesla, announced last Wednesday (20).
Tesla sold Bitcoin in fear of the pandemic in China, Elon Musk said without citing prejudice
Since the beginning of 2020, the crisis presented by the contamination with Covid-19 around the world has retracted markets and caused numerous problems in production chains.
To encourage production, governments injected trillions of dollars around the world to contain these effects, which caused great apprehension for a possible runaway of inflation in the following years. In 2022, in fact, the topic of inflation dominates the economic debate and some government officials already recognize that this is the main challenge to be tackled.
Afraid of the loss of purchasing power, Tesla bought $1.5 billion worth of Bitcoin in early 2021, claiming to be buying the digital currency to protect itself from the possible devastating effect ahead.
About the company’s position, billionaire Elon Musk revealed how many bitcoins he owned, which was something close to 42,000 coins, purchased at an average cost of $36,000 each.
With the confirmation now that a sale was made at the end of the second quarter of 2022, as reported by the company, it is possible that the loss with the operation was in the several million dollars. That’s because, between April and June, the price fluctuated from US$ 46 thousand to just US$ 19 thousand, registering a drop of 56%.
According to one analyst, it is possible that Tesla sales took place in mid-June, when a support break took traders by surprise. If confirmed, Tesla lost 9%, says the trader who believes the company paid $31,000 for each BTC.
In fact, Tesla did not officially report the price paid for the purchase, nor the currency quote when the sale took place, which makes it difficult to estimate gains or losses with this negotiation.
But when considering the time of sales, the company hardly made gains as Elon Musk said in an interview with investors last Wednesday.
“Letuce hands”: know why Elon Musk is being called the lettuce hand?
Since Tesla bought Bitcoin, the price of the coin has gone through several highs and lows, including breaking through its all-time high in November 2021, when it reached $69,000.
In May 2021, for example, after a sharp market crash, Elon Musk said that Tesla had “diamond hands”, indicating that it would not easily come out of its Bitcoin position. When it bought the digital currency, that company told the SEC that it would “maintain its position for the long term.”
Seeing that Elon Musk announced the sale of Bitcoin, the community reacted by making fun of the richest man in the world, as his hands are not diamond as he claimed, but “lettuce”. This term would indicate that a person does not have a firm position on a certain issue.
One of those who joked with Musk was Adam Back, CEO of Blockstream, who cited the billionaire with lettuce stickers.
Tesla did not sell Dogecoin
When saying that Tesla sold Bitcoin to bolster the company’s cash, due to fears about the Chinese economy, Elon Musk declared that he had no problems with the main cryptocurrency.
According to him, it is possible that in the future Tesla will buy some coins again, but he has not determined when this could occur.
However, he said Tesla’s position in Dogecoin remains firm and no meme coins have been sold. It is not clear if DOGE was acquired by the company as an investment, or if it refers to items purchased with it by the company’s customers, an option released in recent months.