On Wednesday, sustainable energy company and EV automaker Tesla released its Q3 earnings report, disclosing a $218 million exposure in Bitcoin. The preceding earnings report indicated just over $220 million of crypto assets under its name. The current figure thus shows that the company didn’t make any adjustments to its Bitcoin portfolio across the three months as opposed to Q2 when it made a massive sell-off.
Tesla is still one of the largest public BTC holders as its portfolio remained untouched across Q3
Tesla’s CEO Elon Musk reported in the Q2 investor call in June a 75% sale of its cryptocurrency reserve, translating to about $936 million then.
“It was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China,” he said at the time.
Notwithstanding the significant sale that brought $64 million in profit, the Musk-led company is still among the largest corporate Bitcoin holders, behind MicroStrategy and Galaxy Digital Holdings. The former is the largest public holder with 130,000 BTC cumulatively acquired through one margin call, a $1 billion equity offering, three bond offerings and four debt deals. The latter holds 16,400 BTC, while Tesla’s stash is estimated to be 9,720 BTC.
The Texas-based EV auto brand logged a $3.3 billion profit from a revenue figure of $21.45 billion across the gone quarter as the broader digital assets market saw increased selling pressure. Bitcoin currently has a market capital of $367 billion – a significant decline from the yearly high of around $900 billion. Though not exact equivalents, the market capital figure ranks it higher than the likes of JP Morgan Chase bank and Bank of America.
Former MicroStrategy CEO: Bitcoin is an economic machine poised to emerge as a freedom machine
In a speech delivered at The Atlas Society on Tuesday, MicroStrategy executive chairman Michael Saylor described the king cryptocurrency as an ‘economic machine’ with the potential to evolve a channel towards freedom. The former CEO highlighted Bitcoin’s decentralization as one of the important factors that make it a useful instrument in addressing the challenges in traditional finance. Further, he likened the asset to a union set to become even stronger as Bitcoin sees more capital inflows.
“As the money moves into the network, the monetary union gets more powerful. Everybody that joins the network has that much more power. Your only hope against the oppressive force of the collective is to unionize your activities and organize your activities with people of like ideology that believe as you believe,” he said.
Saylor, who was previously at the helm of the company before his unexpected resignation in August, guided the software and business intelligence through its Bitcoin exposure strategy since making the first purchase in Aug. 2020. The most recent purchase involved 301 BTC collectively acquired at roughly $6 million. Meanwhile, the first of many repayments and settlements is due in roughly less than a year and a half, while the closest convertible note offering ($650 million) is expected in Dec. 2025. Next week (Oct. 27), MicroStrategy is set to have its earnings call is for the third quarter.
More El Salvadorans view the country’s adoption of Bitcoin as a botched and non-fulfilling measure
A little over a year ago, El Salvador made history by becoming the first country to make Bitcoin an officially recognized currency within its border after approval of the Bitcoin policy heavily championed by President Nayib Bukele. Bukele’s government moved to make the same a reality by allocating $150 million to support the adoption of the same. More than a dozen months later, the decision to make Bitcoin legal tender has been a mix of good and bad.
Several ministries, including Tourism, have reported better figures since then, while the majority of El Salvadorans have expressed disapproval. Barrons reported on Tuesday (Oct. 18) a survey by the University of Central America (UCA), which found that more than three-thirds of the residents view the program as a let-down. The UCA also found that approximately 75% of El Salvadorans haven’t handled digital assets this year.
Though this strikes as baffling, given the efforts made by Bukele’s administration to popularize and foster adoption, it is not entirely inconceivable. Aversion to digital assets is reasonable, especially after an extended period of restricted action limiting volatile opportunities to capitalize on. This has been the case for the better part of this year. El Salvador’s exposure to Bitcoin around the time the crypto was on its way toward an all-time high has meant losses on the holdings at current prices.
In other news around Bitcoin, crypto exchange Coinbase and Blockchain Association have backed Grayscale in its legal recourse to get a spot market BTC exchange-traded fund approved in the US market. The latter DC-based advocacy group filed an amicus brief in the digital asset management firm’s bitcoin ETF appeal on Tuesday. Such supporting briefs entail provision (with court approval) for other outside parties to provide more insight without introducing new facts in the court.
“After approving futures-based Bitcoin ETPs, the SEC has abandoned its investor protection mandate and abused its discretion by denying every application for a spot-based Bitcoin ETP, including Grayscale’s application,” Blockchain Association Head of Policy Jake Chervinsky remarked on the matter.
Grayscale pledged to go all out against the Securities and Exchange Commission as it seeks to get its flagship Bitcoin Trust (GBTC) converted into an ETF. More advocacy groups, including Coin Center and the Chamber of Digital Commerce, are also working on securing amici status. The SEC, which has consistently rejected applications from asset managers citing market manipulation concerns, is expected to deliver its response in the coming weeks.
Investors are moving Bitcoin off exchanges, Santiment data reveals
Bitcoin’s continued tight range-trading action has seen many investors move to the sideline to spectate while ready to pounce on volatile action in all possible directions. The volume of BTC on exchanges has been declining, with one particular drain being the standout. Markets research and analytic platform Santiment observed on Oct. 18 a sum of 40,572 BTC moved out of exchanges within 24 hours. The drain marked the largest daily amount of Bitcoin to go off exchanges in the last four months.
Glassnode’s daily on-chain BTC exchange flow data for Oct. 22 showed inflows of $462.7 million against outflows of $ 543.7 million. The proportion of Bitcoins across exchanges is currently 8.48%, the lowest-ever supply share in almost four years. While a decrease in the supply of a token on trading platforms is typically associated with a less probability of a future sell-off, the latter is not out of the cards. The exchange outflows could also be a pointer to investors’ accumulation trend.
To learn more, visit our Investing in Bitcoin guide.
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