Tesla’s $ 1.5 billion Bitcoin investment could not have come at a better time for the electric automaker. Around the time the company announced its massive stake in the cryptocurrency on February 8, Chinese officials announced that five agencies were interviewing Tesla on quality and safety issues.
In particular, the Chinese State Administration for Market Regulation published this brief statement on February 8th at 8:00 p.m. China Standard Time (12:00 UTC):
“Recently, the General Administration of Market Supervision and Central Cyberspace Administration of China, the Department of Industry and Information Technology, the Department of Transportation, and the Department of Emergency Management’s Fire Rescue Bureau held joint discussions on consumer-reported accelerations, battery fires and OTA -Upgrades (over-the-air). Tesla Motors (Beijing) Co., Ltd. and Tesla (Shanghai) Co., Ltd. are required to strictly comply with Chinese laws and regulations, strengthen internal management, implement primary responsibility for corporate quality and safety, and effectively maintain social public security and effectively protect consumers’ legal rights and interests. “
Two things make this announcement particularly noteworthy.
First, Tesla is known for its good relationships with the Chinese government and is the first foreign automaker to operate a wholly owned plant in China. Second, it came minutes before Tesla filed its annual 10-K report (around 7:30 a.m. ET) with the US Securities and Exchange Commission, stating that Bitcoin was worth $ 1 bitcoin (BTC) in January. Bought $ 5 billion.
Tesla shares closed at 1.3% on Monday, not least due to the purchase of Bitcoin. The cryptocurrency itself broke new record highs on the same day, gaining $ 4,254.48 in the hour Tesla’s Bitcoin position was reported alone. While publications like Bloomberg were quick to take note of the Chinese government’s announcement, it was dwarfed by the sharp upward movements in Tesla stock and Bitcoin price.
Tesla might actually have taken a happy break when it came to timing. However, some saw a connection between the Bitcoin purchase and the Chinese government’s announcement. As Business Insider reported, investor Michael Burry – whose story was dramatized in “The Big Short” – said in a now-deleted tweet that Tesla bought the Bitcoin to distract investors from the news from China. Such a conspiracy, however, would have required impeccable timing, given all the events of the past few weeks.
CoinDesk asked Tesla for comments, but at press time the company hadn’t responded.
The seed that blossomed in Tesla’s Bitcoin purchase was planted weeks in advance. We know the following so far:
The 10-K form submitted by Tesla was created earlier this year compared to previous years, according to data from SEC file tracking website BamSEC. Between 2015 and 2020, Tesla’s 10-K form was typically submitted in late February. In the US, companies have between 60 and 90 days to submit their 10-K forms.
Despite the potentially negative news from China, Tesla shares (TSLA) rose sharply after the US market opened on Monday.
It should be noted that some crypto enthusiasts on Chinese social media platforms like Weibo questioned whether Musk had previously “manipulated” the price of Bitcoin.
Immediately after Bitcoin price dropped below $ 33,000 on Jan. 29 – the price Tesla reportedly bought in early January – Musk tweeted his now famous bitcoin line and added “#bitcoin” to his Twitter bio .
“This may indicate that the [world’s] The richest man allegedly pumped bitcoin and tried to manipulate the market, ”one Weibo user wrote in a post. “If it were true, his behavior would be pretty ‘low’.” “Low” in Chinese meme language means “shame”.
At the time of writing, the price of Bitcoin was $ 46,804.49, according to CoinDesk BPI, up 8.94% over the past 24 hours.
