Elon Musk Decried as “Lettuce Hands” After Tesla Dumps 75% of Its Bitcoin Holdings

“Lettuce hands” is an expression some people use to describe an investor who sells their Bitcoin at the first sign of trouble, often at a loss. An example of its use in a sentence might be: “Elon Musk has lettuce hands because he sold 75% of Tesla’s Bitcoin holdings in the second quarter.”

The above sentence is more than an example; it happens to be the truth. During Tesla’s quarterly results webcast this week, Musk admitted to dumping some $936 million of Bitcoin to raise cash out of concern of an economic pullback due to pandemic lockdowns in China. The chief executive said he sold for a “realized gain,” but some people online have some serious doubts.

To be fair, Musk added that he was open to buying more in the future. But to many Bitcoin fans and advocates, his decision to sell feels like a betrayal—especially since he continues to hold the meme coin Dogecoin, created in 2013 as a joke.

When Tesla initially announced in February 2021 that it had bought $1.5 billion in Bitcoin, the crypto community saw this as signaling the start of a trend of big companies and other institutional investors holding the digital asset on their balance sheets. The enthusiasm only mounted the following month when the electric vehicle (EV) maker announced it would begin accepting Bitcoin as payment.

These plans lasted little more than a month before Musk suspended Bitcoin payments. The reason? Mining the asset, he claimed, consumed too much energy and emitted loads of greenhouse gases.

We now know that Musk’s concerns, while valid, were and are not grounded in truth. Some might call them FUD, or fear, uncertainty and doubt.

Bitcoin Miners Are the “Buyers of Last Resort” When It Comes to Sustainable Energy

Musk is right in one respect: Bitcoin mining is energy intensive, no doubt about it, and it will only get increasingly more energy intensive on a per-coin basis as the difficulty rate heads higher.

Where he’s mistaken is in saying that Bitcoin mining is dirtier than other industries. The truth is that institutional-size miners’ usage of renewable, non-carbon-emitting energy has been shown to be greater on average than that of any large country on earth.

Below are the second-quarter survey results from members of the Bitcoin Mining Council (BMC), of which HIVE Blockchain Technologies is a founding member. According to the data, sustainable energy (wind, solar, hydro, geothermal, etc.) represents an impressive 66% of BMC members’ power mix. For the entire global Bitcoin network, it’s nearly 60%. No G20 country comes close to using that level of renewable energy as a percent of total energy use.

Sustainable Power Mix: Bitoin Mining Vs. Countries

And as many others have pointed out, including myself, large-scale Bitcoin miners are very often the buyers of last resort when it comes to renewable energy. They regularly consume much of the electricity that otherwise would have gone to waste during non-peak hours. This makes sustainable energy more competitive and will encourage further deployment of wind and solar.

Dennis Porter, CEO of the Satoshi Action Fund, whose mission is to educate policymakers on the merits of Bitcoin, takes it a step further. Bitcoin mining, he said in a recent tweet, will one day “be such an important part of the grid that if they try to ban it, we’ll all be without power.”

Despite all of this, Tesla still has no plans to begin accepting Bitcoin as payment again. The only digital asset it does accept is Dogecoin, whose market cap is only about 2% the size of Bitcoin’s.

Shanghai Lockdown a Challenge for Tesla in Q2

We continue to like Tesla, nevertheless. The lockdowns in Shanghai were a huge challenge for the carmaker in the second quarter, with profits down compared to the prior quarter. Now that factories are back up and running, though, we expect to see stronger results when the company reports on the third quarter.

Like tech stocks and luxury goods stocks, both of which Tesla is considered a member, shares have traded down into bear market territory this year on rising rates, recession fears and global supply chain issues.

Telsa vs Tech Stocks and luxury goods