Tesla and its co-founder and CEO Elon Musk sent a wave of volatility through cryptocurrency markets earlier this week when they moved more than $760 million worth of Bitcoin into new wallets after nearly two years of holding it untouched.
The move has raised questions about Musk's intentions and fears of further selling pressure.
Bitcoin Treasuries data showed that the electric carmaker was about 40 hours before the move, holding about 10,000 tokens that Tesla had accumulated in 2021 and sold a large portion amid a bear market in 2022.
Data available from Arkham Intelligence on Wednesday’s move showed that the bitcoin was moved to new wallets rather than to any exchange, quelling early fears of a massive selloff. Tesla and Musk have not commented on the move, though more details could come as early as next week when the company reports third-quarter earnings.
CryptoQuant analyst Marton told Coin Desk on Thursday that the reasons for the move are currently speculative and range from portfolio management to restructuring, suggesting four reasons for the move:
1- Compliance or internal audit: Tesla may transfer Bitcoin to meet accounting or legal obligations related to reporting or internal audit.
2- Portfolio Management: The company may use multiple portfolios for operational purposes.
3- Restructuring funds: This may be part of the company’s strategy to reorganize Bitcoin holdings in anticipation of future sales or loans.
4- The last and most popular reason on social media is the standardization of UTXOs, which are unused or leftover cryptocurrencies from a transaction. Every crypto asset transaction consists of an input and an output. Every time a transaction is executed, the input is deleted and the output is created. Any output left over and not immediately spent is an unspent transaction output that can be spent later in a new transaction.
It is worth noting that using each UTXO in a transaction increases the transaction size, which can lead to higher fees because miners charge fees based on the size of the transaction data. Standardization reduces the inputs for future transactions, which can reduce costs and increase faster transaction speeds in the future.
