Month: March 2021

Tesla’s Bitcoin Folies

Over $200 Billion Market Cap Loss

Tesla Doubles Down on Stupid

On February 8, 2021, with their stock at about $860/share, Tesla disclosed in an SEC filing that they had purchased $1.5 billion in bitcoin and would soon be accepting BTC as a form of payment. As I write this on 3/24/21, the share price is down to about $640, a loss of over 25% in less than 7 weeks.

While Bitcoin owners were happy, many Tesla stockholders thought the move was inconsistent with Tesla’s Environmental Mission and would actually lead to more fossil fuel use as the price of bitcoin goes up.

A Tesla stockholder posting on the Tesla Motors Club Forum

 the first thing I thought of is how bitcoin wipes out all the current and possibly future CO2 savings of the Tesla fleet

CertLive, Tesla Investor
Others Slam Tesla
  • Rueters: Elon Musk wants clean power. But Tesla’s carrying bitcoin’s dirty baggage
  • Matt Elston: Elon Musk: a Reverse Psychology Genius?
  • Axios: Tesla faces scrutiny over carbon costs of bitcoin and vehicle range
  • Green Car Report: How will Tesla’s bitcoin investment affect its carbon footprint?
  • The Verge: Tesla’s $1.5 billion bitcoin purchase clashes with its environmental aspirations
  • Medium: Buying a Tesla in Bitcoins cancels 1/3 of the CO2 savings for its whole lifetime
  • Yahoo/Bank of America: Tesla’s bitcoin investment has carbon footprint of 1.8 million cars

The list goes on and on with The New York Times, Washington Post, Financial Times and many others questioning Musk’s btc move.

Musk Sticks with Bitcoin even after Backlash

So, did Musk and Tesla make the right move in backing bitcoin? Is it important for Tesla to have an environmentally friendly image, or is it more important to diversify their cash holdings? Tesla’s ~$200 billion market capitalization loss since publicly disclosing their bitcoin position would indicate that it is important for corporations to be in touch with their customers’ and shareholder preferences. Blackrock, the world’s largest money manager, has repeatedly emphasized the surge in sustainability investing, views climate change as an investment risk and is calling for companies to disclose how their business model is compatible with a net zero economy. Musk and other CEOs should pay attention!

Coming Soon
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?

Why Environmentalists Should Think About Money

Appealing to Greed and Good:

Human Needs
Human Needs

So where does philanthropy and environmental activism fit into Maslow’s Hierarchy of Needs? Sean Stannard-Stockton proposed that giving is motivated by humans’ deeply held need to find meaning in life which is part of self actualization. Assuming Maslow and Stannard-Stockton are correct, then as environmentalists, we must remember that people must first have their physiological and safety needs met, before they worry too much about the environment.

Why didn’t I also include love/belonging and esteem? I would argue that group environmental action can help fulfil the need to belong and also bring respect, recognition and self-esteem. Regardless, the important thing to remember is that people won’t care about saving the planet (or more accurately put, keeping the planet habitable for humans) until they have water, food, a place to live and a job (or income).