For the first time in two years, Elon Musk’s Tesla has transferred all of its $760 million worth of Bitcoin assets from its public wallet. According to Arkham Intelligence data revealed Wednesday, the firm carried out multiple transactions to move its holdings out of its existing wallet. The move caused the BTC market to stir, with the asset reaching $67,0000 shortly after.
Tesla transferred $75.18 million, $76.08 million, and $77.16 million in the first three significant transactions. This reportedly happened in quick succession. While the firm sent $76.08 million and $77.16 million to the same anonymous wallet, Tesla transferred $75.18 million to another unidentified wallet.
So far, none of the Tesla Bitcoin have made it to exchange wallets or were swapped for stablecoins. This raises the question of why the Musk-founded company decided to make this move after two years of hoddling. The electric carmaker as of the time of the move was the fourth-largest corporate holder of bitcoin, picking up 10,000 tokens in 2021. Tesla or Musk has yet to publicly comment on the movement, but the potential reasons behind the move range in severity.
Also Read: Kraken Launching Its Own Wrapped Bitcoin Token, kBTC
Why Did Tesla Move Its Bitcoin?
CryptoQuant community analyst Maartunn assumes that there are three likely motives for Tesla’s decision to move its Bitcoin:
- Compliance or Internal Audits: Tesla may transfer Bitcoin to meet accounting or legal obligations related to reporting or internal audits.
- Wallet Management: Tesla likely uses multiple wallets for operational purposes. This doesn’t seem likely according to Maartunn because the newly created addresses use similar Pay-to-PubKey-Hash (P2PKH) addresses.
- Restructuring Funds: This could be part of a strategy to reorganize bitcoin holdings in anticipation of future sales or loans, similar to movements seen with Mt. Gox. However, that speculation should be avoided until there is evidence of a sale, such as a transfer to Coinbase. For now, that’s not the case.
Also Read: Inside Tesla HQ: Musk & Bukele’s AI and Bitcoin Masterplan Revealed!
Furthermore, users on social media have speculated that the consolidation of UTXOs (unspent transaction outputs) has played a part in the Tesla Bitcoin transactions. A UTXO can be considered as an individual, unspent amount of any token waiting to be used in future transactions. Each UTXO used in a transaction increases the transaction size, which can lead to higher fees. Consolidating leads to fewer inputs for future transactions. This in turn reduces the cost and increases the speed of a larger transaction in the future.