Tesla Held Onto its Bitcoin (BTC) Holdings in Q4 2023

PALO ALTO, United States – Electric vehicle maker Tesla maintained its substantial Bitcoin ownership throughout Q4 2023, making no changes to its holdings of approximately 9,720 BTC.

The company’s latest earnings report in January 2024 confirmed that it still holds nearly $387 million worth of Bitcoin at current market prices.

Tesla decided to retain its crypto assets even as its share price experienced strong selling pressure in early 2024, declining by almost 16% year-to-date.

Share Price Under Pressure, Operational Metrics Strong

Beyond stock market headwinds, Tesla finds itself on firm operational footing, having exceeded Wall Street’s vehicle delivery estimates for Q4 2023.

The company set a new record by delivering 484,507 vehicles for the quarter. Its total deliveries for the year hit 1.81 million – surpassing estimates of 1.8 million and demonstrating robust core business performance.

Yet despite sound automotive metrics, Tesla shares faced continued bearishness amidst a broader risk-off sentiment pervading equities and crypto markets.

With the crypto market capitalization declining in 2023, Bitcoin dropped approximately 65% from all-time highs.However, Tesla looked past short-term crypto volatility, maintaining its Bitcoin holdings rather than liquidating them at prices that would cause losses.

Long History With Crypto Assets

Tesla’s association with Bitcoin dates back to February 2021, when the company allocated $1.5 billion to acquire around 43,000 BTC.

In a pioneering move by a mainstream corporation, Tesla even began accepting Bitcoin directly as a payment method after its large crypto purchase. However, this policy was later reversed amidst environmental concerns on Bitcoin’s energy consumption, coinciding with a partial liquidation of holdings.

Tesla sold off 75% of its remaining Bitcoin in late 2021 after offloading a small portion earlier that year. Just under 10,000 BTC remain held by Tesla’s treasury since then.

Prominent, Albeit Reduced Bitcoin Exposure

By retaining Bitcoin’s value of almost $400 million even after prior sales, Tesla maintains outstanding crypto holdings relative to most public companies.

Its 9,720 BTC positions Tesla as the 4th largest Bitcoin holder across publicly-listed corporations. Only MicroStrategy, Galaxy Digital, and Marathon Digital control more BTC on their balance sheets.

Tesla’s $1.5 billion crypto allocation represented one of the largest ever Bitcoin buys by a listed outfit in February 2021. The bold move was pioneering, bringing crypto assets onto the radars of Wall Street and mainstream business.

Mainstream Adoption Still Years Away

However, Tesla also learned hard lessons on real-world friction points preventing seamless crypto adoption – like environmental backlash and financial reporting complexities.

Its reversals on accepting Bitcoin payments and divesting some holdings demonstrated that existential barriers persist. Bitcoin’s failure to provide a risk hedge amidst 2023’s equities meltdown further tarnished notions of digital assets as sound portfolio diversifiers.

Tesla’s residual yet unchanged Bitcoin position signals that crypto’s integration with public companies remains in developmental phases. Mainstream adoption is still likely to occur only years down the road.

Conclusion

Tesla retaining its nearly 10,000 Bitcoin through late 2023 without liquidation effectively maintains its position within crypto markets. This comes despite substantial volatility and declines across digital assets in 2023 alongside pressures on Tesla’s share price trajectory.

The decision indicates that Tesla believes in crypto’s long-term staying power while acknowledging persistent growing pains in the interim, as highlighted by its stumbles with Bitcoin payments in the past.

It will likely be a few years before the technology’s friction points fade and crypto becomes viable as a cash treasury asset class for public companies. However, Tesla keeping Bitcoin on its balance sheet signals some faith in this eventually occurring despite all the pitfalls.

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.