Bitcoin defuses a time bomb named Elon Musk

The sale of 75 percent of the holdings of bitcoin by Tesla it is a boon for cryptocurrency. Elon Musk it was a ticking time bomb.

The benefits to bitcoin of Musk’s departure will far outweigh the harm, as explained this week in Leaf of finance.com.

Having the billionaire close to an asset is a source of concern for investors. The shareholders of Tesla, their own company, know this well, but those who have it freshest are those of Twitter, with the unsuccessful purchase offer.

Musk, a bad travel companion for bitcoin

The proof that the crypto market will benefit from the news is that bitcoin barely noticed Musk’s sales in its price. The price continues to hold on the edge of $23,000.

For investors who seek to escape volatility and try to manage their portfolios without the rush and noise of the most immediate short term, Musk’s tweeting incontinence or his unpredictable reactions are not the best recipe for sleeping soundly.

For crypto traders it is much worse, especially swing trading, several weeks ahead.

The volatile and failed example of Twitter

These investors usually leave their positions open on the day, well protected with ‘stop loss’ adjusted to their strategy. However, when they go to bed they are not sure that Musk is not going to mess it up. Twitter and blow up your wards.

For equity investors things are not very different. Without going any further, all the euphoria it caused on Twitter translated into sharp falls after giving up buying the social network, after mobilizing an army of lawyers and analysts on Wall Street.

Now the shareholders of Twitter they will have to finance a legal battle with Musk that they have not sought and that is expected to be long and costly.

lack of transparency

It is difficult to manage a portfolio if Elon Musk go through the middle Tesla shareholders themselves do not yet know the real losses that the sales of two thirds of bitcoins have caused.

“Tesla’s presentation is really vague and not transparent,” said Vivian Fang, an accounting professor at the University of Minnesota Carlson School of Management. “It’s very difficult to figure out exactly what the realized gain is and what the impairment charge is.”

What is known is that Tesla he entered 936 million dollars from the sale of 75 percent of his bitcoins. Tesla’s last remaining bitcoin holdings are valued at $218 million, but the carmaker bought $1.5 billion.

Investors do not know at what prices the bitcoins were sold or the actual losses they caused the group. The only charge the group announced was $922 million for write-offs and impairments.

At the conference with analysts, Tesla CFO Zachary Kirkhorn said that the company’s profit from the sale of bitcoins was offset by an impairment charge, “obtaining a net cost of $106 million” in the account. profit and loss But in the letter to the shareholders there was no news of this 106 million.

bitcoin relief

In short, for now it is impossible to know exactly what his adventure with bitcoin has cost Tesla.

What there is not much doubt about is that for the most popular cryptocurrency in the world, Elon Musk’s sales mean eliminating a potential factor of instability at a stroke.

Of course, for the peace of mind (or who knows if concern) of his followers, Elon Musk kept his dogecoin holdings intact. Not everything was going to be bad news.

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