Analysis by Nickel Digital Asset Management (Nickel), the
regulated and award-winning investment manager connecting
traditional finance with the digital assets market, suggests that
Elon Musk’s tweet earlier this week announcing that Tesla would
no longer be accepting Bitcoin in payment for its cars,
contributed to the company losing as much as $370 million in a
single day as the value of its Bitcoin holdings fell as the
cryptocurrency’s price dropped by as much as 17%
in one day.
Nickel has analysed the purchases of Bitcoin made by Tesla and
estimated the value of its holdings in the cryptocurrency - which
it says was around $2.18 billion before Mr
Musk’s tweet - and then the potential losses as Bitcoin fell in
value following the announcement.
Tesla’s decision to accept Bitcoin as payment for its cars
contributed to the cryptocurrency’s value increasing, and its
announcement earlier this week to reverse this saw its price
fall. Just before the tweet, on the opening of 12 May Bitcoin’s
value was $56,700, and over the next 12 hours it
fell by as much 17% to a low of
$46,980, according to Coinmarketcap.
Mr Musk said the decision to stop accepting Bitcoin as payment
for its cars had been made over environmental concerns regarding
the amount of energy used in mining Bitcoin.
Anatoly Crachilov, co-Founder and CEO of Nickel Digital,
commented:
“The proof-of-work consensus algorithm used in Bitcoin mining is
an energy-intensive exercise, but what is critical here is not
the absolute amount of energy used, but the energy mix - what
percentage comes from renewable sources. According to Cambridge
Centre for Alternative Finance as much as 76% of miners use some
form of renewables in their energy mix, while 39% use exclusively
green energy sources. These figures are expected to improve
further as miners are constantly searching for the cheapest form
of energy – their main expense item - and increasingly this comes
from renewables.
Musk has chosen to undertake a drastic change to Tesla’s
corporate policy, highlighting that nobody can afford to ignore
environmental concerns today, even if this comes at a punchy
marked-to-market loss of your own investment.
But bringing public debate about greener standards is likely to
trigger faster transition of the entire mining industry toward
renewable source of energy. To address investors’ demand for
ESG-compliance investment products, Nickel Digital has been
evaluating opportunity to launch of a dedicated “green” Bitcoin
fund, which will buy and hold only those coins that have been
mined using exclusively renewable sources of energy, offering
full compliance to ESG standards”
Nickel Digital’s infrastructure is designed to offer
various access points to crypto market
Nickel currently has four funds investing in the digital asset
space. Its market-neutral Digital Asset Arbitrage
Fund pursues an absolute return
strategy without expressing directional views on the
underlying cryptoassets market. It exploits market inefficiencies
and price dislocations and harnesses swings of volatility to
deliver consistent positive returns within a strictly defined
risk management framework.
The Nickel Diversified Alpha Fund is a
multi-strategy fund designed to generate
uncorrelated returns in all market environments,
relying on a range of market signals and factors to access
diversified sources of alpha.
Nickel’s Digital Gold Fund, a Bitcoin tracker,
provides secure, efficient, transparent, and liquid access to
physically allocated Bitcoin, and is designed to remove existing
complexities and inefficiencies in Bitcoin index tracking
products. It delivers institutional-grade precision of
trade execution available on both weekdays and
weekends with one of the lowest expense ratios.
The most recent addition to Nickel’s family of funds,
Digital Leaders Altcoin Fund is designed to
capture the growth potential of the broader digital
assets space, spotting early winners of this high growth
area of algorithmisation of financial services
Nickel Digital explores the opportunity of launching a dedicated
ESG-compliant bitcoin fund.
