Tesla’s relationship with bitcoin is not a dalliance, according to the comments made by the company’s CFO and dubbed “master of the coin” Zach Kirkhorn during an earnings call Monday. Instead, the company believes in the longevity of bitcoin, despite its volatility.
Tesla invested $1.5 billion in bitcoin this quarter and then trimmed its position by 10%, Kirkhorn said during the company quarterly earnings call. That sale made a $101 million “positive impact” to the company’s profitability in the first quarter, he added. Tesla also allows customers to make vehicle deposits and final vehicle purchases using bitcoin.
Tesla turned to bitcoin as a place to store cash and still access it immediately, all while providing a better return on investment than more traditional central bank-backed safe havens. Of course, the higher yields provided by the volatile digital currency comes with higher risk.
Tesla bucks the trend of the more cautionary Federal Reserve Chairman Jay Powell who noted back in March at a virtual summit hosted by the Bank for International Settlements that the Fed considers crypto speculative assets that are highly volatile and therefore not useful stores of value. That matters because the basic function of currency is its ability to store value. He also noted that digital currencies are not backed by anything and compared to gold and not the dollar.
