Recent movements of Tesla’s Bitcoin holdings, which initially caused panic about a potential sell-off, appear to be routine transactions with the assets still under Tesla’s control, according to blockchain analytics firm Arkham Intelligence.
On October 15, Tesla transferred all of its Bitcoin—worth approximately $780 million—into multiple unidentified wallets. Arkham, however, believes these were merely “wallet rotations” and that Tesla still retains ownership of the funds. In an October 22 post on X, Arkham stated, “We believe that the Tesla wallet movements that we reported last week were wallet rotations with the Bitcoin still owned by Tesla.”
Tesla’s Bitcoin Transfers Explained
Tesla divided its 11,509 Bitcoin across seven wallets, each holding between 1,100 and 2,200 BTC. The two largest transfers went to wallets labeled “1Fnhp” and “1LERL,” valued at $142.2 million and $128.1 million, respectively.
When news of these massive transfers broke, many on social media feared that Tesla might be planning to dump its Bitcoin, causing anxiety among investors. However, no further movement has occurred from these wallets since October 15, according to Arkham’s data. This, along with Bitcoin’s 5% price increase from the time of the transfers to $69,220 on October 21, helped ease concerns. Bitcoin’s price has since retraced by 2.3%, now standing at $67,600.
Possible Reasons for the Transfers
Although Tesla has not disclosed why it made these transfers, some speculate that the company might be moving its assets to a custodian, possibly to use the Bitcoin as collateral for a loan. Tesla currently utilizes Coinbase Prime Custody for storing its cryptocurrency holdings.
More details about Tesla’s Bitcoin strategy might emerge during the company’s third-quarter earnings call on October 23.
Tesla’s Position in the Bitcoin Market
If Arkham’s analysis proves correct, Tesla remains the fourth-largest corporate holder of Bitcoin, trailing behind MicroStrategy and mining companies Marathon Digital and Riot Platforms, according to BitcoinTreasuries data. Tesla’s sister company, SpaceX, holds 8,285 Bitcoin, valued at $560 million, making it the seventh-largest private holder of Bitcoin.
Tesla first entered the Bitcoin market in February 2021, purchasing $1.5 billion worth of the cryptocurrency. Though CEO Elon Musk briefly allowed Bitcoin as a payment option for Tesla vehicles in March 2021, he quickly reversed the decision due to environmental concerns.
