Tesla’s decision to ditch Bitcoin might’ve been a great idea in 2021. But does it still hold up today?

Source Cryptopolitan

In 2021, Tesla and its owner Elon Musk, the man who once called Bitcoin “a good idea on many levels,” turned their backs on it, citing environmental concerns.

At the time, it seemed like the right move for a company preaching sustainability. But now, Bitcoin has crossed over $100,000, and Tesla is sitting on over $1 billion in unrealized crypto gains. So, does Elon’s dramatic Bitcoin breakup still make sense, or is it starting to look like a decision Tesla might regret?

Back in 2021, Elon tweeted that Tesla was “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” He called out coal, the dirtiest of all fossil fuels, as a major issue.

 

The crypto market immediately reacted. Bitcoin’s price dropped by more than 10% in a few hours. Elon’s influence was undeniable. Bitcoin believers were furious, calling him hypocritical. After all, Elon knew exactly how Bitcoin worked before Tesla jumped in.

Critics accused him of using environmental concerns as a cover for Tesla’s strategy to cash out during Bitcoin’s bull run. Whatever the motives, the decision was definitely a turning point for Tesla and its relationship with Bitcoin and for Elon’s relationship with the crypto community.

The concerns versus Bitcoin’s growth

There was a reason Elon’s environmental argument hit hard in 2021. Reports from the Cambridge Centre for Alternative Finance showed Bitcoin mining used more electricity annually than entire countries like Sweden or Malaysia.

Tesla, the poster child for clean energy, couldn’t be associated with an energy-intensive process powered largely by fossil fuels. Fast forward to today and the Bitcoin mining industry has made real progress in adopting renewable energy.

An estimated 52% of Bitcoin’s global mining operations now use renewable sources, up from 39% in 2021. That’s a big jump. But even with cleaner energy, Bitcoin’s mining process still guzzles electricity, and its overall environmental footprint remains massive.

This keeps Tesla’s sustainability argument alive, even if it’s starting to look outdated. But here’s the twist: while Tesla ditched Bitcoin payments, it never abandoned Bitcoin itself. The company has held onto its crypto stash the entire time. And that gamble has paid off big time.

Tesla’s Bitcoin fortune and its strategic moves

Shortly after the first purchase, Tesla sold 10% of its Bitcoin, pocketing $101 million in profits. By 2022, Tesla offloaded another 75% of its holdings, netting $936 million. Elon later said these sales were to “test Bitcoin’s liquidity,” but many saw them as well-timed exits during Bitcoin’s bull market.

Right now, Tesla still owns 11,630 Bitcoins. Elon hasn’t ruled out accepting crypto payments again, but he’s made it clear Tesla will only do so if mining becomes more sustainable. Financially, it’s hard to argue with the results.

Tesla’s Bitcoin holdings have ballooned in value, and the company is thriving elsewhere. Just last week, Tesla stock hit an all-time high of $424.77, fueled by Wall Street optimism, Elon’s political connections, and the global bull run.

Elon’s influence and the political wildcard

Speaking of politics, Elon’s growing influence in Washington could completely rewrite Tesla’s crypto narrative.

After spending $277 million to support Donald Trump’s presidential campaign, the eccentric billionaire is now close friends with the president and is set to lead the Department of Government Efficiency under the incoming administration.

This role gives him significant sway over federal regulations, including those related to crypto and autonomous vehicles. A pro-crypto administration means looser regulations and more mainstream adoption, which would benefit both Tesla and its Bitcoin holdings.

Analysts see Elon’s political maneuvering as a strategic play to position Tesla for future gains, both through crypto-friendly policies and faster approval processes for Tesla’s EV tech.

Either way, this is a great opportunity for the company to jump back in. Trump himself has promised to not do anything that could crash Bitcoin, and Tesla is no longer in a financially precarious position. Elon might wanna take his confidence up a notch.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin CME gaps at $35,000, $27,000 and $21,000, which one gets filled first?Prioritize filling the $27,000 gap and even try higher.
Author  FXStreet
Aug 22, 2023
Prioritize filling the $27,000 gap and even try higher.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
Here are all the Trump insiders who sold off billions in stocks before tariff announcementExecutives from some of America’s biggest companies sold off billions of dollars in shares right before Trump’s tariff announcement hit the markets. The trades happened during the first quarter of 2025, as tension built around the White House’s next economic move.
Author  Cryptopolitan
Apr 21, Mon
Executives from some of America’s biggest companies sold off billions of dollars in shares right before Trump’s tariff announcement hit the markets. The trades happened during the first quarter of 2025, as tension built around the White House’s next economic move.
placeholder
Ethereum (ETH) Underperforms All Top 5 Major Cryptos in Brutal 2025 DowntrendDespite signs of improving momentum, with RSI climbing and EMA lines hinting at a potential breakout, ETH continues to lag behind competitors like Solana in multiple metrics.
Author  Beincrypto
Apr 23, Wed
Despite signs of improving momentum, with RSI climbing and EMA lines hinting at a potential breakout, ETH continues to lag behind competitors like Solana in multiple metrics.
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
goTop
quote