Tesla may have already earned $600 million on its bitcoin investment, but experts raise concerns

Tesla may have already earned $600 million on its bitcoin investment, but experts raise concerns

Elon Musk’s Tesla recently invested $1.5 billion in bitcoin. Britta Pedersen-Pool/Getty Images Tesla’s $1.5 billion investment in bitcoin led to it trading at over $50,000 for the first time. Tech expert Álex Barredo said Tesla may have already earned $600 million on the investment. Founder Elon Musk’s Twitter endorsement of bitcoin has led to allegations of “criminal behavior.” Visit the Business section of Insider for more stories .
Tesla founder Elon Musk has courted controversy with his investment in bitcoin and subsequent endorsement of the cryptocurrency on Twitter.
In documents filed with the Securities and Exchange Commission last week, Tesla announced it had invested $1.5 billion in bitcoin and would soon accept the cryptocurrency as a form of payment.
Tesla board member Antonio Gracias , who has stakes in several cryptocurrencies, may have been behind the investment. The company noted the significant risks of the decision in their filing, including volatility and regulatory uncertainty.
Bitcoin soared 16% to a record high of $44,795.20 after the announcement and shares of Tesla jumped as much as 2%. Earlier this week, the price jumped to above $50,000 for the first time.
However, Spanish tech journalist Álex Barredo pointed out on Twitter that the company acquired its bitcoin throughout January when the trading price was $34,893.
He further estimated that Tesla bought 42,069 bitcoin.
Using this level of reference calculated by Barredo, Tesla would now have a net worth of more than $2.11 billion, meaning an average profit of over $600 million since it purchased the coin in January. Economist Dr. Nouriel Roubini said Musk’s actions could be illegal. Tom Williams/Getty Images
Musk came under fire from experts for the way his Twitter announcement of the investment caused the bitcoin surge, with economist Dr. Nouriel Roubini saying his actions could be ” criminal behavior .”
“First take an individual position in bitcoin, pump the price up, and then say that Tesla has invested,” he said of Musk’s strategy in an interview with CoinDesk . “It’s also irresponsible and it’s market manipulation.”
Roubini has always been skeptical of cryptocurrencies, calling them a ” gigantic speculative bubble .”
Vitor Constâncio, former vice president of the European Central Bank, also said in a Twitter thread that the “SEC will look into this.” He cited Tesla’s omission of when the investment was made as a potential issue.
In December, Musk posted a meme suggesting he was tempted to buy bitcoin. In late January, he changed his Twitter bio to the word “#Bitcoin” and posted, “In retrospect, it was inevitable.” This caused bitcoin to surge 15% . —Elon Musk (@elonmusk) January 29, 2021
Musk also endorsed the cryptocurrency dogecoin, which started out as a meme. Musk’s tweet referring to it as ” the people’s crypto ,” created a surge in the currency which then traded at 59% higher than 24 hours before.
He later announced he had bought some dogecoin for his son and called on major shareholders to sell their coins, saying he would pay money in return. SEC commissioner said it was time for clearer guidelines on cryptocurrencies. REUTERS/Joshua Roberts
Republican commissioner for the SEC Hester Peirce, who is supportive of bitcoin, told Reuters it was time for clearer guidelines on the use of cryptocurrencies.
“That adds to the urgency of us taking some sort of action in this area to provide more clarity,” Peirce said of several companies including Tesla and Mastercard announcing they would accept the currency as a form of payment. Read the original article on Business Insider España . Copyright 2021. This post has been translated from Spanish. Follow Business Insider España on Twitter . Newsletter Your morning cheat sheet to get you caught up on what you need to know in tech. Sign up to 10 Things in Tech You Need to Know Today. Loading Something is loading. Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy Policy .

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