Four Reasons Elon Musk’s Tesla May Have Moved $760M of Bitcoin
- News In 4 Seconds
Shaurya Malwa
- 0
- 7 minutes read
Some bitcoin traders were spooked as Tesla on Wednesday moved its BTC stash for the first time in over two years.
So far, though, none of the bitcoins have apparently made it to exchange wallets or were swapped for stablecoins.
Here’s some reasons why companies may move their digital assets.
Elon Musk-controlled Tesla (TSLA) created ripples earlier this week as it moved over $750 million worth of bitcoin (BTC) to new wallets after nearly two years of the stash being untouched.
The action sparked conversation around Tesla’s/Musk’s intentions and concerns of further selling pressure.
The electric carmaker as of the time of the move roughly 40 hours ago was the fourth-largest corporate holder of bitcoin, BitcoinTreasuries data showed, with about 10,000 tokens. Tesla accumulated its holdings in 2021 and sold a sizable chunk amid the 2022 bear market.
Available data from Arkham Intelligence on the Wednesday move showed the BTC was transferred to new wallets and not to any exchange, alleviating early fears of a sizable sale. Tesla or Musk are yet to publicly comment on the movement, though more detail may come early next week when the company reports its third quarter earnings results.
The reason(s) for now are limited to speculation and they range from wallet management to restructuring, CryptoQuant community analyst Maartunn told CoinDesk in a Telegram interview on Thursday:
Compliance or Internal Audits: Tesla may transfer bitcoin to meet accounting or legal obligations related to reporting or internal audits.
Wallet Management: Tesla likely uses multiple wallets for operational purposes. This doesn’t seems likely because the newly created addresses uses similar Pay-to-PubKey-Hash (P2PKH) addresses.
Restructuring Funds: This could be part of a strategy to reorganize bitcoin holdings in anticipation of future sales or loans, similar to movements seen with Mt. Gox. However, that speculation should be avoided until there is evidence of a sale, such as a transfer to Coinbase. For now, that’s not the case.
Another possible reason getting some social media chatter could be the consolidation of UTXOs (unspent transaction outputs) – i.e., the process of combining multiple UTXOs into one or fewer UTXOs. A UTXO can be considered as individual, unspent amounts of any token waiting to be used in future transactions.
Each UTXO used in a transaction increases the transaction size, which can lead to higher fees because miners charge based on the data size of the transaction. Consolidating leads to fewer inputs for future transactions, potentially reducing the cost and increasing the speed of a larger transaction in the future.
