Elon Musk And Satoshi Nakamoto Making Millionaires At Record Pace
Millionaire Bitcoin Addresses Go Parabolic As BTC Price Crosses $20K. Elon Musk And Satoshi Nakamoto Making Millionaires At Record Pace
Early BTC miners with the foresight to hodl have now become millionaires.
Bitcoin’s (BTC) parabolic run has turned early miners into millionaires at a pace rarely seen before. Data from Glassnode shows that the number of Bitcoin addresses holding at least $1 million has skyrocketed to 66,540 this week — an increase of 150%.
The rise of millionaire wallets is attributable to early miners retaining their Bitcoin over the years, culminating with the asset’s latest surge above $20,000.
As Glassnode Tweeted On Thursday:
“$BTC crossing $20k has turned all early miner addresses (50 BTC block rewards, unspent or lost) into millionaire addresses.”
The tweet was accompanied by a chart showing the number of millionaire addresses at or near record highs, with the last major peak coinciding with Bitcoin’s late-2017 top.
Bitcoin’s rally intensified on Thursday, zipping through $23,000 with very little resistance. On-chain data suggests another parabolic move could be imminent as BTC enters a new phase of price discovery. At current values, Bitcoin has a total market capitalization of nearly $430 billion.
While early Bitcoin miners benefited from larger block rewards, they were operating in a market that was highly speculative and much more volatile than today. Today’s miners receive only 6.25 BTC per block but have greater assurances that their efforts will be rewarded as Bitcoin evolves from an obscure, esoteric concept to a mainstream digital asset.
As Cointelegraph recently reported, cryptocurrency mining has evolved from a small endeavor to an industrial business as more entities look to capitalize on Bitcoin’s network infrastructure. Institutional inflows have made mining the digital asset more appealing than ever before.
Currently, miners produce roughly 900 BTC per day — a quantity that is being quickly consumed by institutions and businesses, many of which are recent adopters.
Elon Musk Has Made Millionaires Out of His Most Loyal Fans
They bought Tesla shares early and kept the faith. After a dizzying year, with the stock up more than 700%, is it time to cash in?
Brandon Smith does not own one of Tesla Inc.’s sleek electric cars. In the small town south of Milwaukee where he lives, even seeing one on the road is rare.
But in late June 2017, Smith poured $10,000 of savings into Tesla’s stock. He said it was the first time he’d ever invested in a company. That was just the start. Each paycheck, Smith, a video producer, would pay his bills and then buy additional shares with the rest, ultimately putting about $90,000 into the volatile stock.
“I don’t make six figures, and I don’t know anything about puts and options,” Smith, 32, said in a phone interview. “I’ve just bought and held the entire time. I’ve never sold a single share.”
Now Smith has joined the ranks of the “Teslanaires,” as some of the company’s investors call themselves, with a holding that he says has ballooned to over $1 million, fueled by a rally of nearly 731% this year as of Friday’s close.
On Monday, Tesla will join the S&P 500 Index, a huge milestone for Elon Musk and the company he’s led as chief executive officer since 2008. It’s also a big day for the legions of retail investors who flocked to Tesla’s clean-energy mission and rode out numerous storms — production misses, Elon’s tweets and even the pandemic market crash.
Those who held on have been handsomely rewarded: Tesla’s shares have soared this year after five consecutive quarters of profits and growing sentiment on Wall Street that the shift toward electric vehicles is accelerating.
Where the stock heads from here is up for intense debate. To begin with, investors and analysts still wrangle over what Tesla is: A car company? A clean-energy behemoth? A technology company?
There’s also disagreement over how it should be valued. Goldman Sachs has a price target of $780, while JPMorgan Chase’s is down at $90.
You don’t have to work on Wall Street to get deeply into the weeds on Tesla’s operations and finances. A dense, sprawling ecosystem of podcasts, Reddit threads and YouTube channels dedicated to nearly every facet of Tesla makes it possible to learn about the company without ever reading an analyst report.
There are countless forums and regional owners’ clubs that gather on Zoom or meet up to check out Tesla’s latest Supercharger station. Ryan McCaffrey’s weekly “Ride the Lightning” podcast is in its fifth year, and Rob Maurer’s “Tesla Daily” drops every weekday.
Smith said he probably spends two to three hours a day learning about Tesla, often scrolling through the forums on his lunch hour.
Tesla has fully embraced retail investors like no other publicly traded company. Its quarterly earnings calls regularly feature crowd-sourced questions.
During a contentious earnings call in May 2018, Musk chided Wall Street analysts for asking dry and “boring, bonehead” questions. “We’re going to go to YouTube,” he said, and then allowed Gali Russell, the host of a financial talk show geared toward millennials, to ask questions for 23 minutes.
On a January earnings call, Musk said he thinks retail investors have “deeper and more accurate insights” than many institutional investors and analysts.
Laura Goldman, 62, says New York-based analysts missed how much appeal the company holds for a younger generation that’s deeply worried about the climate crisis. Goldman, a former stockbroker, doesn’t even own a car — let alone a Tesla.
She bought 300 of the company’s shares in the fall of 2010, a few months after its IPO, and picked up more stock over time.
All the while, Goldman says that legacy automakers like General Motors Co. and Ford Motor Co. appeared to sit on the sidelines as the electrified future arrived. “I have rich Republican friends,” she said.
“When they started buying Tesla cars, that convinced me to hold onto the stock.”
As of Thursday, she was close to joining the ranks of paper millionaires, saying her Tesla shares were worth nearly $984,000. She notes how Musk is often portrayed as crazy — as if that’s a negative. But the billionaire’s version of crazy is a willingness to push boundaries, she said, and she believes that’s the reason Tesla has succeeded.
Then there are the investors in Tesla’s stock who are also proud owners of the company’s cars.
Basel Termanini, 60, took delivery of his first Tesla — a Model S — on Christmas Eve 2012. He’s owned seven and currently drives a Model Y in Pittsburgh, where he is a doctor. “Driving a Tesla is like the difference between a black-and-white TV and color,” Termanini said in a phone interview. “Once you drive a Tesla, you can’t go back.”
Termanini invested in the company a few months after the June 2010 IPO and says his investment has grown to over $2.5 million, between options and stock. He has traded over the years but he’s not selling now, a decision that’s made easier by the fact that he has a diversified portfolio.
Investing in a single company — particularly one as historically volatile as Tesla — is risky. But the appeal of the sector is easy to understand.
“Electric vehicles are one of the areas of the energy transition that individual people can very much relate to,” said Colin McKerracher, head of transport analysis at BloombergNEF. “Mobility is personal in a way that decarbonizing electricity supply, for example, is not. The way you turn on your lights is still going to be the same whether it was powered by solar or gas and coal in the past. The way you drive looks and feels different in this new era, and I wouldn’t underestimate the excitement that’s creating for investors.”
Holy smoke’s I’m a $TSLA-naire! It was @Gfilche that got me inspired to invest 42 months ago, @truth_tesla‘s deep dives that bolstered my confidence, @TeslaPodcast kept me regularly informed. TY to @Tesla employees & @elonmusk for executing. The journey just started, HODL pic.twitter.com/9jCEFgzcDv
— Brandon Smith (@BLSmith2112) December 8, 2020
The question for many of these Teslanaires is what to do now. Spread some risk into other investments? Sell to pocket some of the gains? Or stick with Musk?
Goldman said she’ll be watching closely to see how the stock trades as part of the S&P 500, since that means Tesla will appear in more mutual funds and large institutional holdings.
“The volatility and the fanatics in the stock are part of what made investing in Tesla so fun,” she said. “It was fun to be part of the anti-establishment. It’s not as fun to be part of the S&P.”
Smith doesn’t have an exit strategy for his Tesla investment, though he’s begun thinking of finally building, or buying, his own house. Currently, he and his brother share a house that their grandfather built in Cudahy, Wisconsin.
Monday — the day Tesla joins the S&P — is his 33rd birthday. He remains bullish on Tesla’s future, pointing to what he sees as the growth still to come.
“The next big thing is fourth-quarter deliveries, when Tesla could reach 500,000 deliveries for the year,” said Smith, who has a Cybertruck T-shirt and was able to get a bottle of “Teslaquila” before it sold out. “Then you have the new battery production in Texas and the Cybertruck, which doesn’t even need a paint shop. There’s the energy side of the business. I don’t think people realize the scale of Tesla’s ambitions.”
Elon Musk Debates How To Give Away World’s Biggest Fortune
Elon Musk is not only the world’s richest person, he lays claim to the biggest net worth ever recorded: $209.3 billion as of Friday. What he does with it will be closely watched.
Judging by Twitter, the Tesla Inc. co-founder’s preferred medium of communication, philanthropy is on his mind. One of his first reactions on becoming the wealthiest human — after an initial shrug — was to solicit advice on how to give it away.
Btw, critical feedback is always super appreciated, as well as ways to donate money that really make a difference (way harder than it seems)
Musk, 49, is a philanthropy neophyte compared with those he just leapfrogged on the Bloomberg Billionaires Index of the world’s 500 wealthiest people.
Longtime No. 1 Bill Gates and his friend Warren Buffett, co-founders of the Giving Pledge initiative that urges the ultra-wealthy to donate at least half their fortunes, have each given away tens of billions in cash and stock. Even Jeff Bezos, who has been criticized for being slow to establish himself as a philanthropist, has stepped up his game. He pledged to give $10 billion to issues related to climate change last year and handed out $791 million to 16 environmental groups in November.
Despite signing the Giving Pledge, Musk has done relatively little publicly in the way of charity. He’s donated more than $257 million to the Musk Foundation — equivalent to about 0.1% of his current net worth — which in turn distributed $65 million between 2016 and 2018 to about 200 nonprofits, according to an analysis by Quartz.
Had Gates not donated so much — or Bezos not gotten divorced — then their fortunes would be much bigger, possibly greater than Musk’s.
Yet Musk has indicated that the reason he’s accumulating wealth is to give it away, or at least redirect it to his passion projects, namely, space exploration. “It’s going to take a lot of resources to build a city on Mars,” he told German publisher Axel Springer last month. “I want to be able to contribute as much as possible.”
“It’s impossible to overstate the potential his fortune could have,” said Benjamin Soskis, senior research associate at the Urban Institute’s Center on Nonprofits and Philanthropy. “We’re dealing with a scale which is difficult to fathom.”
The surge in Musk’s wealth means he’ll need to greatly increase the pace of donations to have any shot at fulfilling his pledge to give more than half away, Soskis said. “He needs to be much more aggressive than he’s being now.”
The question from philanthropy experts is how Musk will go about doing so. The world’s richest people have taken a variety of approaches: Gates has become both a full-time philanthropist and public figure in areas like public health. Twitter Inc. co-founder Jack Dorsey has made his giving transparent by posting each donation to a publicly available spreadsheet.
By turning to Twitter to get suggestions for donations, Musk is following in the footsteps of Bezos, who sent out a similar tweet requesting ideas from his followers in 2017. MacKenzie Scott, Bezos’ ex-wife, has pioneered another model for billionaire giving: approaching hundreds of nonprofits and educational institutions and handing over big checks with no strings attached. Her gifts in 2020 totaled nearly $6 billion.
Brian Mittendorf, an Ohio State University professor who studies nonprofits, suggested Musk follow Scott’s lead and restrain his instincts to innovate.
“A trap that many wealthy philanthropists fall into is a desire to reinvent philanthropy on their own, rather than rely on those who already have expertise and experience but simply need the funds in order to expand their impact,” he said.
CFOs Hesitate To Invest In, Handle Bitcoin Due To Volatility
Finance chiefs are watching closely after Tesla disclosed a $1.5 billion purchase this week.
Chief financial officers are watching closely after Tesla Inc. this week disclosed a $1.5 billion investment in bitcoin and Twitter Inc.’s Ned Segal mused publicly about potentially paying employees or vendors using the cryptocurrency.
Many CFOs remain hesitant to follow suit. Some point to the volatile price of bitcoin, which could have negative effects on their balance sheets, and question whether the practical uses of bitcoin are worth the risk. Companies’ investing policies in some cases prohibit them from holding digital assets.
The value of Bitcoin more than quadrupled in 2020 and rose further this week following Tesla’s disclosure. It was trading $48,163 on Thursday, up over 6% from Wednesday, according to Coinbase, a digital currency exchange.
CFOs said the swings in the price of bitcoin, which has seen drastic rises and falls in recent years, make it difficult to navigate, similar to holdings of foreign currencies experiencing strong volatility. “One of the risks is that it introduces something similar to currency volatility to the balance sheet and the day-to-day operations of the business,” said Matthew Ellis, finance chief of Verizon Communications Inc.
The telecommunications company currently has no plans to enable bitcoin for payments, Mr. Ellis said, adding that it would bring an added level of complexity to the business.
R. Scott Herren, the finance chief of Cisco Systems Inc., said customers aren’t demanding to pay in bitcoin. “We looked at this pretty hard when I was at Autodesk, as a way of accepting payment”, Mr. Herren said, referring to his time as CFO of the San Rafael, Calif.-based software company. Autodesk Inc. in the end decided against permitting bitcoin as a form of payment, mainly due to volatility and risks around converting it into a regular currency, Mr. Herren said.
Roxi Wen, the CFO of Mozilla Corp., said she is following discussions around bitcoin, but doesn’t consider it an asset worth holding on the balance sheet. While Mozilla, the organization behind the Firefox internet browser, might invest in early-stage ventures related to bitcoin, it wouldn’t allocate its corporate cash to it. “I don’t see us trying to ride the market and benefit from bitcoin or any coin,” Ms. Wen said.
Mr. Segal, Twitter’s CFO, said Wednesday the company continues to review potential uses of the digital currency. His Chief Executive Jack Dorsey is a bitcoin advocate. Payment company Square Inc., which Mr. Dorsey also leads, recently acquired about $50 million worth of bitcoin for its corporate treasury.
Finance chiefs face an accounting challenge when dealing with bitcoin and other digital assets. Because they don’t meet the requirements for cash, inventory or financial assets under current accounting standards, digital currencies have to be treated as indefinite-lived intangible assets, similar to trademarks or perpetual franchises. Companies have to test the value of these assets for impairments, meaning that potential falls in bitcoin could result in write-downs.
CFOs also have to make sure that they are permitted to invest in bitcoins under their company’s investment policy. Tesla on Monday said its board had greenlighted amendments to its investment policies, adding that it can also invest cash in gold bullion and gold exchange-traded funds among other assets.
German software giant SAP SE, currently can’t make similar investments in bitcoin due to the company’s investment policy, which doesn’t cover cryptocurrencies, according to a spokeswoman. Still, the company said it would monitor future developments in terms of bitcoin as a potential strategic investment option, a spokeswoman said.
Online-dating company Match Group Inc. also might have to alter its investment policy to be able to make such an investment, according to Chief Operating Officer and CFO Gary Swidler.
“I am not sure we want to get into that level of speculative currency with our balance sheets,” Mr. Swidler said.
Debbie Clifford, CFO of SVMK Inc., the parent of online-survey company SurveyMonkey, said speculative assets such as bitcoin are a tough sell for small companies that are focused on growth, but may appeal to larger, mature companies.
“I see those companies looking at new and interesting ways to drive value for shareholders with the capital they have to work with,” she said. “We have discussed bitcoin but have not seriously considered investing in it given our current capital structure.”
Elon Musk: ‘Only A Fool’ Wouldn’t Seek Non-Fiat Investments
With real interest rates trending negative, Tesla’s CEO Elon Musk believes “only a fool” would ignore alternative investment opportunities.
On Feb. 19, Musk responded to comments made by Binance CEO Changepeng Zhao to Bloomberg in which CZ expressed his surprise at the Tesla executive’s “gung-ho” pronouncements regarding Dogecoin.
Tesla co-founder and hypothetical Dogecoin (DOGE) CEO Elon Musk has asserted that “only a fool” would not seek out alternative investments to fiat currency given current interest rates on Twitter today.
During the interview, CZ implied that Tesla’s recent decision to invest $1.5 billion or 7.7% of its treasury into Bitcoin (BTC) likely evidenced Musk’s deep support for Bitcoin.
On Twitter, Musk said, “Tesla’s action is not directly reflective of my opinion. Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company.”
Responding to the insinuation from Musk that he personally holds DOGE in higher esteem than BTC, Blockstream CSO Samson Mow said, “You’re just sad you didn’t buy sooner.”
However, Musk also asserted it would be foolish not to seek out alternative investments while “fiat currency has negative real interest”:
“When fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is ‘almost.’”
Elon Musk’s Twitter account has been deemed the catalyst for Dogecoin’s dramatic recovery from the r/Wallstreetbets-led pump and dump that targeted the meme-coin at the end of January, with the billionaire describing DOGE as “the people’s crypto.”
However, Musk tweeted on Feb. 15 to warn of the heavy concentration of Dogecoin’s supply within the hands of a small number of whales, offering to pay the top DOGE holders to void their accounts.
Elon Musk Says Bitcoin Prices ‘Seem High’ After Record Week
Bitcoin surged to another record on Saturday after reaching more than $1 trillion in market value for the first time, leaving some of its biggest backers in a state of wonderment.
In a tweet, Elon Musk said Bitcoin prices “seem high.” The world’s richest person was replying to Peter Schiff — a crypto skeptic and gold bug — who said the precious metal is better than Bitcoin and fiat money.
“Money is just data that allows us to avoid the inconvenience of barter,” Musk tweeted. “That data, like all data, is subject to latency & error.” In a following post, he added, “that said, BTC & ETH do seem high lol.”
Musk earlier called Bitcoin a “less dumb” version of cash. The largest cryptocurrency rose as much as 3.4% to a record high of $57,527 on Saturday before paring gains to $57,040 at 1:26 p.m. in New York. It’s surged 56% since the end of January and more than quadrupled last year. For several years after its debut more than a decade ago, Bitcoin traded for just a few cents.
Crypto believers are dueling with skeptics for the dominant narrative around the climb: the former see an asset being embraced for its ability to hedge risks such as inflation, while the latter sense a precarious mania riding atop waves of monetary and fiscal stimulus.
Musk gave impetus to Bitcoin joining the mainstream when Tesla Inc. said it invested $1.5 billion and was prepared to begin accepting the cryptocurrency as a form of payment for its cars. According to Dan Ives at Wedbush Securities, Tesla has made a profit of about $1 billion over the past month from that bet.
“To put this in perspective, Tesla is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020,” Ives wrote in a note Saturday.
Traditional finance officials who have seen little value in the digital currency see the surge as part of a larger speculative bubble.
Howard Lutnick, chief executive officer of Cantor Fitzgerald LP, said the dramatic rise in values of Bitcoin and Tesla was driven by retail investors in much the same manner that led to last month’s surge in GameStop Corp. shares. Tesla gained more than 700% last year.
“With all due respect: What’s Tesla been? Why was Tesla up?” Lutnick said Friday on Bloomberg TV. “It’s because retail kept buying it. Why is Bitcoin where it is? Because retail keeps buying it. This is just another form of the same thing. GameStop was Bitcoin and Tesla.”
Taking The Lead
Doubling Of Crypto Index This Year Puts Stocks, Commodities In The Shade
Still, investors haven’t failed to notice the outperformance compared with traditional assets. The Bloomberg Galaxy Crypto Index has towered over the returns of stocks, gold, commodities and bonds so far this year.
Advocates such as former hedge fund manger and Galaxy Digital founder Mike Novogratz are seeking to position themselves for even bigger gains.
Galaxy’s trading desk is one of several that are providing Bitcoins for the Purpose Bitcoin ETF, the first ever approved. The Toronto Stock Exchange-listed fund debuted Thursday. CI Global Asset Management filed this week in Canada to offer the CI Galaxy Bitcoin ETF. Galaxy Digital will act as the Bitcoin sub-advisor, and execute trades on behalf of the proposed ETF. None have been approved in the U.S.
“Crypto is being institutionalized at an accelerating rate,” Novogratz said in an interview Friday with Bloomberg. “It’s all part of this accelerating evolution of being a store of value.”
Elon Musk’s Bitcoin Marketing Coup
By embracing bitcoiners, Tesla is likely to make more sales among that crowd even if they pay in fiat. Any extra BTC the carmaker gets is gravy.
Here’s some free advice for the Honda Motor Company: Market your cars to the newly bitcoin rich.
I’ve already got the ad copy for you.
A true bitcoiner is building for the future and deferring gratification. She doesn’t blow her hard-earned savings on flashy toys. She prefers a solid, dependable family car.
And a slogan….
Lambos are for losers. HODLers drive Hondas.
Marc Hochstein, CoinDesk’s executive editor, owns some bitcoin, and if he were smarter he’d have bought more years ago. This article is excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories on the future of money and Web 3.0. You can subscribe to get the full newsletter here.
OK, so I’m no Don Draper. It’s doubtful Honda or any other affordable carmaker would heed my suggestion any time soon. It’s different for luxury electric vehicle maker Tesla, which doesn’t need to be told – it’s already doing something similar.
This week, the manufacturer began accepting bitcoin (BTC) as payment for its cars, delivering on a promise made in early February by its impish chief executive, Elon Musk. Underscoring his faith in the currency, Musk declared on Wednesday that Tesla would keep rather than convert any bitcoin it earns from car sales.
Typically, the rare merchant that accepts crypto as payment for goods or services will swap it right away for U.S. dollars or another fiat currency. That’s understandable, given the price volatility and the low likelihood that a merchant’s suppliers would take magic internet money. But the Tesla chief said his company is HODLing.
For the uninitiated, HODLing is bitcoin slang for refusing to sell BTC, either to take profits in a bull market or to cut losses in a bear market. Based on a forum poster’s drunken misspelling of “hold,” the word broadly connotes a steely determination in the face of fear, uncertainty and doubt. A HODLer is someone who, to borrow from Rudyard Kipling, “can keep your head when all about you/Are losing theirs and blaming it on you.”
Musk clearly is one, in at least the narrow sense, having invested $1.5 billion in bitcoin for Tesla’s corporate treasury beginning this year. Over the last 12 months, the cryptocurrency’s price has soared nearly 700%, as inflation fears, a self-perpetuating hype cycle and possibly pandemic lockdown boredom spurred buying among individual and institutional investors. Like Tesla, for instance.
Yet, while I’m sure Musk would be happy to keep growing Tesla’s BTC stash one car sale at a time, I strongly suspect that isn’t his only or main motivation.
Rather, my gut is that the payment option is at least in part, if not primarily, a clever marketing maneuver.
Incentives to HODL
First off, there’s no indication Tesla is offering a discount to buyers who pay with bitcoin, which you might expect the company to do if its main goal were to acquire more of the stuff. Also, Tesla surely understands bitcoiners are strongly disincentivized to part with their “sats” (a loving nickname for the currency’s smallest unit, 0.00000001 BTC, in homage to creator, Satoshi Nakamoto).
This is partly for the reason I alluded to in my quixotic Honda pitch: Bitcoin is deflationary by design. There’s a set amount – 21 million BTC – that will ever be minted. Yet, as it grows in popularity, denominating things such as luxury cars in bitcoin ends up hurting the buyer over the long run.
While the price oscillates wildly from one minute to the next, if you zoom out the lens real wide, bitcoin has generally appreciated over time, which encourages saving (or “hoarding,” depending on your worldview). Remember that pizza purchased for 10,000 bitcoin in 2010? Ten thousand bitcoin is worth $500 million today. Hope the pizza tasted good.
Also, in the U.S. crypto is treated as property for tax purposes, which means that if you buy a coin for, say, $1 and it doubles in value and you spend that extra dollar on a cup of coffee, you are supposed to report the purchase to the Internal Revenue Service and pay tax on it.
It remains to be seen whether Uncle Sam will go after every last Joe Schmoe who fails to report a piddling purchase. But it’s reasonable to assume anyone who uses crypto gains to buy a Tesla (which can run from $39,000 to $150,000) would show up on the taxman’s radar.
Even if a buyer can overcome those hurdles, Tesla isn’t making it easy. As CoinDesk’s Daniel Kuhn reported Thursday, when paying Tesla with bitcoin, a car buyer has “about 30 minutes” to complete the transaction or else the price in BTC expires and a new one must be requested. Also, Tesla will only accept exact amounts and will not reimburse payments sent to an incorrect address.
All told, even if you have large bags of bitcoin, it may make more sense to pay with fiat, whether for a Tesla or a tall latte.
Crypto is already obsessed with a car: the Lamborghini. But it’s more of a joke than anything. Were Tesla to become the true status symbol in this industry, it could move the needle.
By embracing bitcoiner culture, Musk is likely to make more sales among that crowd than would happen otherwise, even if they’re settled in greenbacks. Any extra bitcoin Tesla picks up would be gravy.
In the Wednesday tweet, Musk also revealed Tesla is running its own node, rather than relying on a third party to tell it what’s happening on the Bitcoin network. This is considered a best practice for advanced users, but it’s also a signal to the tribe: I get it. I’m one of you. It’s closely associating the Tesla brand, and Musk’s, with the ethos of the sovereign individual that animates the crypto community, not least of all the bitcoin faithful.
Think of it as a weird 21st century twist on affinity marketing, but without any formal partnership like the one my college had with a credit card lender in the 1990s, which led to me getting up to my ears in debt from charging stuff I didn’t need and couldn’t afford. Gee thanks, alma mater; I wish bitcoin were around back then to set me straight.
There is also a less charitable interpretation of Musk’s messaging: That he’s trying to divert attention away from bad news for Tesla. As CoinDesk’s Muyao Shen reported in February, the big coming-out party coincided with the revelation by Chinese officials that they were questioning Tesla about quality and safety issues.
And this week’s bitcoin announcement conveniently happened right after reports that U.S. regulators are scrutinizing Tesla’s autopilot technology.
If true, this explanation is not mutually exclusive with my hunch. Tesla HODLing bitcoin could be a cynical PR move and a marketing coup – and a sincere adoption of an innovation in the world of bits by an innovator in the world of atoms, all at the same time. Binary thinking is for fools.
It’s far from certain if the marketing ploy, if that’s what it is, will work. “Not quite sure if anything sold yet in bitcoin,” a Tesla representative told my colleague Thursday.
But for my money, it’s better than anything Madison Avenue could come up with.
SpaceX Owns Bitcoin, Elon Musk And Nic Carter Believe BTC Is Becoming Greener
Musk revealed that SpaceX owns Bitcoin and that Tesla may be close to accepting BTC payments again after looking into BTC’s sustainability.
Tesla CEO Elon Musk has revealed for the first time that his firm SpaceX owns Bitcoin (BTC).
The company is yet to officially announce how much Bitcoin it has purchased, however Musk’s other company Tesla purchased $1.5B of the cryptocurrency earlier this year which sparked a major Bitcoin price rally.
That rally came to an abrupt end after Tesla stopped taking Bitcoin payments due to environmental concerns, but speaking at “The ₿ Word” — a virtual Bitcoin (BTC) event — the erratic tech billionaire suggested Tesla was on the verge of accepting the cryptocurrency again following promising signs the percentage of renewable energy used for mining was increasing.
The changing narrative of Bitcoin going “green” may help reignite a rally, with Coin Metrics co-founder Nic Carter telling CNBC a few hours ago that BTC’s fundamentals are getting better in terms of sustainability.
Musk appeared alongside Ark Invest CEO Cathie Wood, and Twitter CEO Jack Dorsey, and moderator Steve Lee from Square Crypto. Musk did not reveal any additional details about SpaceX’s purchase apart from saying:
“I do own Bitcoin, Tesla owns Bitcoin, SpaceX owns Bitcoin, and I do personally own a bit of Ethereum and Dogecoin of course.”
He did add that: “We’re not selling any Bitcoin, nor am I selling anything personally or nor is SpaceX selling any Bitcoin.”
The statement confirms longstanding speculation the space infrastructure company was adding Bitcoin to its reserves. In mid-March, Anthony Scaramucci claimed in a Tweet that he believed Musk did not stop with just Tesla’s purchase.
Elon Musk didn’t stop with Tesla. I understand that SpaceX owns #bitcoin on its balance sheet. @elonmusk owns over $5 billion in #bitcoin via Tesla, SpaceX, and personally. No living person has done more to protect the planet against climate change. (1/2)
— Anthony Scaramucci (@Scaramucci) March 19, 2021
During the event, Musk donned a BTC themed t-shirt and appeared to be relatively optimistic about the future of digital gold as he stated that he owns “much more Bitcoin than Ether or DOGE.”
— The Wolf Of All Streets (@scottmelker) July 21, 2021
Musk stated that there “appears to be a positive trend” in renewable energy usage for BTC mining, citing the recent closure of coal-powered mining plants in China.
“I want to do a little more diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number. If so, Tesla will resume accepting Bitcoin,” he said.
Nic Carter Discusses Mining On CNBC
Speaking about Musk’s latest comments with CNBC’s Fast Money on July 22, Carter said he was “glad” that Musk had began to evaluate the “ facts on the ground because they are very favorable.”
Carter echoed Musk’s sentiments on China-based BTC mining, noting that the “Chinese hash rate was very much influenced by energy produced by coal,” and that there had been a lack of transparency from “anonymous miners” in that region.
“The fundamentals are getting better in terms of the sustainability of Bitcoin,” Carter said. The Coinmetrics co-founder pointed to the fact miners in the U.S and Canada are more likely to use sustainable practices and are more willing to disclose information.
“A lot of that [mining in China] has been replaced by mining in Canada and the U.S., where miners are much more sustainably focused. We’re also seeing a lot more disclosure from miners, 32% of the hash rate joined a council, the Bitcoin Mining Council, and they produce quarterly disclosures now,” he said.
Carter referenced the Bitcoin Mining Council’s (BMC) recent study which surveyed 32% of miners on the BTC.network. The poll produced an estimate of a 67% sustainable power mix in Q2.
It is unclear if Musk has factored in this survey as part of his due diligence, however, as it relied on self-reported data from a limited set of just three survey questions.
Carter conceded that the sustainability of BTC is not going to be fully verifiable until the world sees where the majority of miners set up shop following the exodus from China. However, in his own view, he stated that:
“I think Bitcoin is perfectly suitable for payments today, and of course the environmental costs are offset by its enormous utility”
Elon Musk Says Bitcoin May Have Already Hit His Benchmark On Renewable Energy
“I want to do a little more diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number,” said the Tesla CEO.
Tesla CEO Elon Musk has hinted that the crypto industry is on its way toward greener future, but Tesla won’t be accepting Bitcoin payments just yet.
Speaking at “The ₿ Word” — a virtual Bitcoin (BTC) event with Twitter CEO Jack Dorsey, Ark Invest’s Cathie Wood and moderator Steve Lee from Square Crypto — Musk said that Tesla would “most likely” consider resuming crypto payments for its vehicles — a policy the CEO said the company would be stopping in May — but said he needed to exercise diligence before making a decision.
“There appears to be a positive trend in the energy usage of Bitcoin,” said Musk, alsexpressing skepticism at the speed at which the network had moved towards green energy sources. “There’s just no way you could basically double or triple the amount of energy in such a short period of time with renewables […] Tesla’s mission is accelerating sustainable energy. We can’t be the company that does that and not do appropriate diligence on the energy usage of Bitcoin.”
“It looks like Bitcoin is shifting a lot more towards renewables and a bunch of the heavy duty coal plants that were unequivocally being used have been shut down, especially in China. I want to do a little more diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number. If so, Tesla will resume accepting Bitcoin.”
In May, Musk announced that Tesla would no longer accept Bitcoin payments due to the network’s “increasingly rapid use of fossil fuels.” The price of the crypto asset subsequently fell under $40,000 for the first time since February. The Tesla CEO later clarified that the company would resume BTC transactions when there was confirmation miners were using more than 50% clean energy “with positive future trend.”
Musk also addressed some of the allegations from professionals that he had orchestrated a pump-and-dump scheme given his social media posts on cryptocurrencies including BTC and Dogecoin (DOGE). He said the only three assets “of any significance” that he owned outside of SpaceX and Tesla stock were BTC, DOGE, and Ether (ETH), and that neither he nor Tesla had sold any Bitcoin since the announcement stopping crypto payments.
“If The Price Of Bitcoin Goes Down, I Lose Money,” Said Musk:
“I might pump, but I don’t dump. I definitely do not believe in getting the price high and selling it or anything like that.”
As Cointelegraph reported, Musk said in April that Tesla had sold a portion of its Bitcoin holdings — with net proceeds of roughly $272 million at the time — to prove the asset’s liquidity as an alternative to cash. He has not revealed how much of the crypto asset he personally owns, but said even his one-year-old son owns some Dogecoin.
Tesla Reports Record $1B Income For Q2 Despite $23M Impairment Loss On BTC
Tesla’s latest earnings report showed that the firm conducted no digital asset purchases or sales in Q2 but reported an impairment loss of $23 million on its BTC holdings.
Electric vehicle and clean energy firm Tesla has reported $1.14 billion in net income for the second quarter.
The firm’s Monday earnings report showed that total revenue grew by 98% year-on-year for Q2, increasing from $6 billion in 2020 to $11.9 billion this year. Tesla attributed the bulk of its growth to a surge in demand for its electric vehicles, stating:
“In the second quarter of 2021, we broke new and notable records. We produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0%, and exceeded $1B of GAAP net income for the first time in our history.”
The firm also generated quarterly profits of $1.02 per share.
The firm stated that total revenue was partially offset by growth in operating expenses and a Bitcoin-related impairment loss of $23 million.
As Tesla holds its Bitcoin (BTC) as an “intangible asset,” accounting rules mandate that the firm must report an impairment loss when the asset’s price drops below its cost basis. However, Tesla is not required to report price appreciations in the underlying asset until the position is realized through a sale.
The report also shows that Tesla didn’t buy or sell any digital assets in Q2. As such, Tesla’s sole crypto purchase remains its $1.5-billion BTC buy in Q1, with the firm having also cashed out $272 million during the same quarter.
Tesla’s $1.14 billion in net income was calculated using Generally Accepted Accounting Principles (GAAP) — a collection of commonly accepted accounting rules used for financial reporting, such as expense matching and revenue recognition.
Non-GAAP figures, which exclude irregular or non-cash expenses, such as depreciation, one-time balance sheet adjustments and acquisitions, estimate the firm took in $1.6 billion with a profit of $1.45 per share.
Speaking at the virtual conference “The ₿ Word” on Thursday, Tesla CEO Elon Musk quashed rumors that the firm may sell its holdings in the near future, also teasing that it may resume accepting BTC payments for its electric vehicles.
Musk also revealed for the first time that his aerospace firm, SpaceX, holds BTC, emphasizing that Tesla and SpaceX have no plans to sell:
“We’re not selling any Bitcoin, nor am I selling anything personally or nor is SpaceX selling any Bitcoin.”
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