Early in the first quarter of 2021, Tesla announced that it had bought Bitcoin worth $1.5 billion. The news was by far the biggest corporate endorsement of cryptocurrency, and Tesla’s CEO, Elon Musk (then the richest man in the world) arguably became the most influential voice in the space. The news was one of the biggest fundamental tailwinds that inspired a push of Bitcoin prices to highs above $60,000. In an official filing to the US SEC, Tesla said its purchase of Bitcoin was to provide flexibility, diversify as well as maximize returns on its available cash reserves.

But news hit the wires on April 27^th, 2021 that Tesla had sold 10% of its Bitcoin holdings. The news quickly elicited criticism that Tesla and Elon Musk were literally pumping and dumping the world’s first cryptocurrency. The claims were quickly refuted by a rejoinder tweet from Elon Musk, who explained that Tesla was selling 10% of its holding to prove the liquidity of the cryptocurrency as an alternative to holding cash on its balance sheet. Musk went ahead to confirm that he had not sold any of his bitcoin holdings.

Tesla bought into Bitcoin at circa $33,500 and sold 10% of its stake at circa $56,000. The sale generated revenues of about $272 million, and profits of about $101 million. This was very positive for Tesla, considering the sale was done within a few weeks of buying the primary cryptocurrency.

There was minimal impact on the price of Bitcoin following these headlines. The coin remained resilient and held firmly above $54,000 following a dip below $50,000 last week. Investors were buoyed by comments from Tesla that the company was impressed by how easy it was to buy and sell the cryptocurrency as well as confirmation that Elon Musk was holding onto the coin for the long term. Tesla also confirmed that it intends to be a long-term holder, and will continue to accumulate the coin from car purchases made by their customers using Bitcoin. The company did not confirm whether it will make any future big purchases like the $1.5 billion buy early in the year, but the Bitcoin and wider crypto community will be glad Tesla continues to be optimistic about the industry.