YEREVAN (CoinChapter.com) — The bullish predictions for the cryptocurrency industry this year set the stage for companies to increase their stakes in Bitcoin. Tesla (TSLA), one of the largest public firms in BTC holdings, could buy more Bitcoin in 2024, especially after it missed out on the recent rally.
However, the electric car manufacturer, led by the world’s richest man, Elon Musk, has previously faced criticism for its Bitcoin investment. The company has long presented its electric vehicles as sustainable, green, and environmentally friendly alternatives to petrol-run cars.
Many have raised questions about the negative impact of Bitcoin mining on the environment, which cannot go hand in hand with Tesla’s green image.
At the time of writing, BTC exchanges hands at $43,700 per token, according to portfolio management platform CoinStats.
Will Tesla buy more Bitcoin?
Tesla currently holds 9,720 Bitcoins in its kitty, giving it a market value of around $424 million based on the current BTC price.
The Elon Musk-led firm first bought Bitcoin in February 2021, when it shed a whopping $1.5 billion for the leading crypto. Back then, BTC price hovered around the $36,000 mark.
However, the company sold some of its Bitcoin holdings, dumping around 10% of its stash in March 2021. This was followed by a larger dump of 75% in the second quarter (Q2) of 2022.
As Musk later explained, the sale did not mean the company had given up on the asset. Rather, it was calculated to help the company face economic uncertainties.
“The reason we sold a bunch of our Bitcoin holdings was that uncertainty as to when the COVID lockdowns in China would alleviate, so it was important for us to maximize our cash position given the uncertainty of the COVID lockdowns in China,”
Musk said following the development.
Elon Musk might want more
Despite Tesla’s massive Bitcoin dump, the world’s richest man did not rule out buying more BTC when the time was right.
“We are certainly open to increasing our coin holdings in the future, so this should not be taken as some verdict on Bitcoin,”
he had said.
Since then, Tesla’s economic condition has been improving. The company ended 2023 with a free cash flow of $4.4 billion. Of this, $2.1 billion came from Q4, a 33% increase.
With Tesla’s cash flow rising throughout 2023, Elon Musk does not have the same problems to worry about. Considering that Bitcoin may be poised for a bull run in 2024, he may want to cash in on the price surge.
This becomes more plausible once we consider that the company has already lost about $300 million in profits after selling its BTC. While it does not count as a loss, it still is a missed opportunity since it helped the company find more stable ground.
Moreover, Bitcoin mining has since pivoted towards more green energy sources. This will help Musk retain his firm’s brand image, synonymous with renewable energy and technological innovation, even if Tesla buys more Bitcoin.
