Accounting rules force selling Bitcoin? Musk's post breaks up with Bitcoin, Sun Yuchen wants to take over

Tesla founder Elon Musk posted on the 4th at 9 a.m. Taiwan time, with content that appears to be a meme related to Bitcoin reaching its end. Tron founder Justin Sun commented below, saying, "Willing to take all the bitcoins sold by Musk." Following this post, the price of Bitcoin immediately dropped from the 38600 level to the 37400 level. As of the deadline, it was at 37750.

Is Tesla Forced to Liquidate Bitcoin due to Negative News in June?

Aside from showing Musk's significant influence on the market, the current price of Bitcoin is likely close to Tesla's buying price. It is speculated that Tesla bought 48,000 bitcoins at an average price of around $31,250. The company has sold a portion in the first quarter for liquidity testing purposes.

Recalling that Tesla offloaded 10% of its Bitcoin holdings, Musk clarified: it was merely to prove there was enough liquidity, and he personally did not sell any Bitcoin.

According to Tesla's accounting rules, the company may have to liquidate its Bitcoin holdings if they incur investment losses.

Reportedly, based on accounting rules, Tesla may liquidate its holdings under certain market conditions such as liquidity and pricing:

"Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Consequently, at each reporting date, if the value of these assets is lower than the purchase price, an impairment charge is recognized. As we currently intend to hold these assets long-term, in the event of impairment, these charges could negatively impact our profitability even if the overall market value of these assets increases during the impairment period."

Details are expected to be revealed in Tesla's second-quarter financial report or confirmed by Musk before knowing whether Tesla will indeed sell its Bitcoin holdings.