The founder of a major investment bank has branded Elon Musk’s Bitcoin dealings as “inefficient and unattractive” to Tesla stakeholders.
Musk’s motor company last night revealed it had offloaded around three-quarters of its Bitcoin holdings which, at one point, were worth about $1.5 billion.
It is understood the South African entrepreneur has stressed the financial move is more of a reflection of Tesla’s need for cash than a statement on cryptocurrency. The 51-year-old last year flirted with the crypto community a number of times with both Bitcoin and then Dogecoin after controversially reversing a decision to accept Bitcoin as payment for Tesla vehicles over environmental issues relating to Bitcoin mining.
However, Lars Seier Christensen – chairman of the Concordium Foundation and founder of Saxo Bank – has dismissed concerns that Musk’s apparent ditching of Bitcoin will have a negative impact on the cryptocurrency industry.
“Elon Musk’s whirlwind on-off romance with Bitcoin seems to be coming to an end, but I wouldn’t read too much into Tesla selling its Bitcoin stake, because it was also clearly stated that this should not be seen as a verdict on crypto, but more a way to increase the liquidity of Tesla,” Christensen explained.
“That being said, the abrupt reversal on first accepting and then not accepting Bitcoin is interesting. Personally, I think bigger listed companies should avoid making themselves a Bitcoin play and instead focus on their core businesses. There is a wide variety of options if you want to invest in Bitcoin in the long term – either simply buying it outright or through some of the many funds that actively manage their crypto exposure. It doesn’t make sense to do this via Tesla or – in the extreme – Microstrategy.
“Business people should do what they are hopefully best at – running their businesses and exceling in their domain. Combining – or rather confusing – this with rampant crypto speculation is both inefficient and unattractive for their stockholders.”