Elon Musk reveals Tesla is still holding bitcoin as crypto price crashes

Tesla boss Elon Musk has clarified that the electric vehicle manufacturer has not sold any of its bitcoin holdings, after saying a week earlier the company would no longer accept the crypto as payment for its cars.

The price of bitcoin dropped to a three-month low below $43,000 in the early hours of 17 May, plunging more than 10% in 24 hours. 

“To clarify speculation, Tesla has not sold any bitcoin,” Musk said in a post on Twitter, though he provided no details on which time period he was referring to.

Following his tweet, bitcoin’s price immediately rebounded more than 4% to around $44,500 as of 7:45am BST.

The crypto had already been in decline after Musk said Tesla would suspend accepting bitcoin for purchases a week earlier but the company’s change in policy triggered a major sell-off of cryptocurrencies across the board.

READ  Is it time to get out of bitcoin? Here’s what the experts think after Musk’s U-turn

Other cryptocurrencies were also in the red over the previous 24 hours, with ether falling 11.8%, XRP falling 10.5% and litecoin dropping 10%. Dogecoin, which has benefited from favourable attention from Musk in recent weeks, fell more than 9%.

Tesla bought $1.5bn in bitcoin earlier this year, though it later sold around $272m during its first quarter. The carmaker said the fair market value of its holdings had reached $2.48bn by the end of March, marking a potential windfall of $1bn. 

It comes after fintech firm Square told Financial News that it had “no plans” to make additional bitcoin purchases at this point in time. 

READ  Square has ‘no plans’ to buy more bitcoin

The payments fintech’s chief financial officer Amrita Ahuja said in a 14 May interview that Square didn’t “have any plans at this point to make further purchases”. 

Following criticism of the move on social media, Square chief executive Jack Dorsey, who also helms Twitter, later said  “bitcoin changes *everything*… for the better. And we will forever work to make bitcoin better.”

READ  Chances of bitcoin falling to $10k lessen, despite Tesla U-turn

Square took an impairment of $20m on its $220m investment in bitcoin last quarter, though the fair market value of its holdings had risen to $472m.

To contact the author of this story with feedback or news, email Emily Nicolle

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