Is Tesla making more money selling cryptocurrencies than selling cars? The emergence of giant whales has an impact on the market

On April 27, Tesla's unaudited first quarter financial report showed that its net profit in the first three months was $438 million, of which $101 million was earned by selling Bitcoin. The company said in January this year that it had invested $1.5 billion in Bitcoin.

Soon, Tesla founder Musk said that the sale of Bitcoin was to prove its liquidity as a cash substitute on the balance sheet, and he did not sell his Bitcoin. The company's CFO Zachary Kirkhorn also immediately stated that Tesla believes in the long-term value of Bitcoin and will continue to invest in Bitcoin.

Investors in the crypto asset market quickly thought of the more than 25% drop in Bitcoin in the previous week. Currently, the "King of Coins" has gradually recovered from the low of $47,400 and rebounded to around $53,000.

According to OKLink statistics, as of now, 21 global listed companies such as Tesla have held a total of 178,253 BTC, accounting for 0.95% of the total BTC circulation. However, whales are not only listed companies, EOSIO's parent company Block.one holds 140,000 Bitcoins, accounting for 0.74% of the total circulation.

The Bitcoin market is always affected by the actions of big whales, and the mood of retail investors is also affected by the news from these big whales.

According to Santiment data, during the period when BTC prices fell, about 16 new "whales" holding 100 to 10,000 bitcoins joined the network. The bull run seems to be continuing.

Tesla's cryptocurrency sales account for 1/4 of its profits

In the early morning of April 27th, Beijing time, Tesla released its unaudited first quarter financial report. The financial report showed that Tesla's Q1 revenue was US$10.389 billion, a year-on-year increase of 74%, and its net profit was US$438 million, a 2637.5% increase from US$16 million in the same period last year.

Interestingly, Tesla’s financial report disclosed that the net profit of $438 million included $101 million from the sale of digital assets. In other words, the income from investing in digital assets accounted for 1/4 of Tesla’s profits.

This also makes some people think that "Tesla makes more money by selling coins than selling cars." Previously, Tesla had revealed that the company's investment in Bitcoin was as high as $1.5 billion, and the company also included Bitcoin as a payment method for consumers to purchase Tesla vehicles.

After releasing the financial report, Musk revealed that the company invested $1.5 billion in Bitcoin in the first quarter and then cut its position by 10%, "which led to a slight increase in our profits in the first quarter." The financial report shows that as of March 31 this year, Tesla's Bitcoin assets were $1.331 billion. Based on the price of BTC on that day, the company still held at least 266.26 million BTC.

According to the calculation of Wu Shuo Blockchain, a cryptocurrency blogger, Tesla sold BTC at $56,000 (or sold it around that price) and bought it at around $33,500. OKLink data shows that Tesla currently holds 42,857.14 bitcoins.

Since Bitcoin fell by as much as 25% from its high of $64,000 in the previous week, falling to $47,000 at one point, some investors associated Tesla's sale of the currency with a "market crash."

Musk also quickly responded to the outside world that the company sold Bitcoin to prove its liquidity as a cash substitute on the balance sheet, and he did not sell his own Bitcoin. Then, Tesla's CFO Zachary Kirkhorn said that Tesla believes in the long-term value of Bitcoin and emphasized that the company will continue to invest in Bitcoin.

During the period when Tesla released its financial report, Bitcoin fluctuated between US$53,000 and US$54,000, gradually rebounding by 12% to 14% from its interim low of US$47,000.

16 new whales enter the market during the down cycle

The market's attention to the dynamics of Bitcoin held by Tesla once again reflects investors' attention to Bitcoin whales, especially in the context of this bull market being regarded as an "institutional bull."

This week is the earnings week for US companies, and MicroSrategy, another listed company that holds a large amount of Bitcoin, has not yet disclosed its financial data. According to OKlink data, MicroSrategy currently holds 91,579 Bitcoins, with no new increases or decreases in holdings within 7 days.

Globally, there are 21 listed companies holding digital assets, such as Tesla and MicroSrategy, according to OKLink’s statistics. According to calculations by Honeycomb Finance, they hold a total of 178,253 BTC, accounting for approximately 0.95% of the market circulation (18,691,812 BTC).

Among non-listed companies, there are also many Bitcoin whales, such as Block.one, the parent company of EOS.IO, which went bankrupt but has not yet cleared the user assets of the exchange MtGOX. Both parties hold about 140,000 BTC. The BTC holdings of these non-listed companies account for about 1.8% of the market's circulation.

The majority of whales are still untraceable. On the Bitcoin rich list, whales with low transaction counts are often predicted to be non-exchange addresses. There are hundreds of whale addresses with transaction frequencies between 1 and 10, and the number of bitcoins contained in them is counted in thousands or tens of thousands.

Before April 23, during the current Bitcoin decline, about 16 new “whales” holding between 100 and 10,000 Bitcoins joined the network. Considering that these high-net-worth individuals hold between $5.4 million and $540 million in Bitcoins, some analysts predict that the surge in purchasing power could translate into a large amount of money in the Bitcoin market.

Western capital drives the Bitcoin market

Which capital is dominating the market price of Bitcoin?

According to an article published by ChainDD, as early as January this year, the New York Digital Investment Group (NYDIG), a Bitcoin institutional investment company, published a research article on "Geographical Drivers of Bitcoin Returns". NYDIG stated that from the perspective of trading time, Bitcoin's cumulative returns show that its price gains from 2020 to 2021 were driven by investors in the Western world (Europe and the United States).

The agency divided the 24 hours of the day into three equal trading sessions: North America (9 a.m. to 5 p.m. Eastern Time), Asia (5 p.m. to 1 a.m. Eastern Time), and Europe (1 a.m. to 9 a.m. Eastern Time) to analyze the cumulative returns of Bitcoin.

In 2020, Bitcoin's returns have steadily increased during the North American and European trading hours, with the cumulative return during the North American trading hours reaching 132% (calculated from January 1, 2020). In 2021, the European trading hours seem to have become a more important driver of Bitcoin's returns. From January 1, 2020 to April 19, 2021, Bitcoin's cumulative return during the European trading hours was 254%, while the cumulative return during the US trading hours was 162%. This may be because the European trading hours overlap with the Asian evening trading hours and the US pre-opening trading hours.

The Asian trading session had the opposite effect, with a cumulative return of negative 15% from January 1, 2020 to April 19, 2021.

NYDIG believes that Bitcoin's returns clearly show that Europe and the United States are key drivers of Bitcoin's rise, as shown in its report, North American entities have accumulated a considerable portion of Bitcoin's supply since January 2020.

The Bitcoin market is "de-Asianizing", and the European and American markets provide a strong driving force for Bitcoin. This is also the reason why investors pay close attention to the investment of European and American companies in Bitcoin. During the US stock earnings week, there may be more listed companies that will disclose their investment trends in Bitcoin.