Elon Musk suddenly transferred 1163 Bitcoins, what exactly happened?

According to data from Arkham Intelligence, a cryptocurrency wallet associated with Elon Musk's SpaceX transferred approximately $105 million worth of 1,163 Bitcoins to a new wallet address today. This is the company's first significant Bitcoin transfer since October 29, and analysts believe this transfer indicates that the space giant has improved its custody strategy rather than planning to liquidate.

Musk's SpaceX transfer of 105 million dollars in Bitcoin has drawn attention

(Source: Arkham Intelligence)

According to data from Arkham Intelligence, Elon Musk's aerospace company SpaceX transferred over $105.4 million worth of Bitcoin on Wednesday. SpaceX transferred 1,163 Bitcoins to two unmarked wallets around 6:16 PM, with 399 Bitcoins sent to the address “bc1qh…galzy” and 764 Bitcoins transferred to “bc1q4…u54ez”. This pattern of split transfers is common among large holders, usually to diversify risk or optimize custody structures.

This is the company's first significant Bitcoin transfer since October 29, when the company moved 281 Bitcoins to a new Wallet Address. The consecutive two months of transfer activity indicate that SpaceX is actively managing its Bitcoin holdings, contrasting with a long period of dormancy. Notably, the Wallet reactivated in late July after three years of dormancy, sending Bitcoin worth $153 million. This reactivation may be related to adjustments in SpaceX's financial strategy or changes in custodial arrangements.

As of Wednesday night at 9 PM, the trading price of Bitcoin was $90,921, up 3.14% in the past 24 hours. At this price, 1,163 Bitcoins are worth approximately $105.7 million. Such a large transfer usually draws market attention, as investors worry it could be a precursor to a sell-off. However, judging by the behavior of the receiving address, there has been no transfer or sale so far, and the purpose remains unknown.

The motivation behind SpaceX's transfer is still unclear. Some believe that SpaceX's actions are merely to consolidate its Bitcoin holdings while transferring the encryption currency from an old traditional Wallet Address to a new modern Wallet Address. This explanation is more reasonable, as with the advancement of Wallet technology, upgrading from single-signature Wallets to multi-signature Wallets and transferring from hot Wallets to cold Wallets are common security enhancement measures.

SpaceX Bitcoin transfer details

Transfer Amount: 1,163 BTC

Transfer Value: Approximately 105 million USD

Receiving Address 1: bc1qh…galzy (399 BTC)

Receiving Address 2: bc1q4…u54ez (764 BTC)

Current Position: 6,095 BTC (worth 552.9 million USD)

Transfer Time: November 26, 6:16 PM

Elon Musk's Bitcoin Empire: SpaceX and Tesla

According to Arkham, Elon Musk's SpaceX currently holds approximately 6,095 Bitcoins, valued at about $552.9 million as of today. This figure makes SpaceX one of the largest private companies in the world by Bitcoin holdings. In contrast, Musk's other company, Tesla, holds 11,509 Bitcoins, worth $1.05 billion. Together, the two companies hold about 17,604 Bitcoins, with a total value exceeding $1.6 billion.

The relationship between Musk and Bitcoin has always been controversial. In 2021, Tesla announced the purchase of $1.5 billion in Bitcoin and briefly accepted BTC as a payment method. However, Musk later suspended Bitcoin payments for environmental reasons, triggering a sharp decline in BTC prices. According to data from Arkham, Tesla sold off most of its Bitcoin holdings in 2022, with this sell-off occurring during the market turmoil caused by the collapse of the Terra-Luna project and the FTX bankruptcy.

The situation with SpaceX is similar. Reports indicate that SpaceX reduced its Bitcoin holdings by about 70% in mid-2022 due to the market crash. According to data from Arkham, SpaceX has not purchased Bitcoin since then. This means that the current 6,095 BTC are the remaining portion after the sell-off in 2022, and based on the market prices at that time, the cost basis for these tokens may be in the range of $20,000 to $30,000, currently enjoying about 3-4 times of paper profit.

Elon Musk's personal attitude towards Bitcoin has always been ambiguous. He has publicly stated that he prefers Dogecoin, claiming that DOGE is more suitable as a transactional currency. However, his company still holds a large amount of Bitcoin, indicating that, at the corporate financial level, Bitcoin's status as a store of value is still recognized. This separation of personal preference from corporate strategy is a typical characteristic of Musk in the cryptocurrency space.

Custody Optimization vs Market Speculation Before Dumping

Analysts believe that the latest transfer indicates that this space giant has improved its custody strategy rather than planning to liquidate. This judgment is based on several observations: the address after the transfer has not yet conducted any subsequent transactions, the transfer is spread across two addresses rather than concentrated in one exchange address, and the timing of the transfer (when the market is rebounding) does not align with the logic of a sell-off.

From a custodial security perspective, distributing large amounts of Bitcoin across multiple addresses is standard practice. Holding hundreds of millions of dollars in a single address poses a single point of failure risk; if the private key is leaked or lost, all assets will be at risk. After distributing to two addresses, even if one encounters a problem, the other remains secure. Furthermore, using new addresses may imply an upgrade to more secure wallet technologies, such as multi-signature wallets or hardware security modules (HSM).

However, there are still concerns about a sell-off in the market. SpaceX sold 70% of its Bitcoin holdings during a market downturn in 2022; will this happen again? From the current market environment, Bitcoin has just broken through 90,000 USD, and market sentiment is improving, making this an ideal time for a sell-off (profit-taking at a high point). However, from the company's financial perspective, SpaceX has ample operating cash flow and does not urgently need to liquidate its Bitcoins. Furthermore, if a sell-off were to occur, it would typically be transferred directly to an exchange Address, rather than into two unmarked new Addresses.

From an on-chain analysis perspective, the receiving address has not yet transferred or sold, which is the most critical evidence. If SpaceX plans to sell, it usually sends the Bitcoin to an exchange within a few hours to a few days after the transfer. Currently, the receiving address still holds all the Bitcoin, indicating that there will be no sell-off in the short term. Investors should continue to monitor these addresses; if there is a trend toward the exchange, it may indicate that a sell-off is imminent.

The Bitcoin Strategy of the Musk Family Business

The strategies of SpaceX and Tesla in Bitcoin investment are worth comparing. Tesla heavily purchased 1.5 billion dollars worth of Bitcoin at an average price of about 35,000 dollars during the peak of the bull market in 2021. Subsequently, during the market crash in 2022, it sold off the majority, reportedly realizing some profits but also incurring losses. This kind of “buy high and sell low” operation has sparked criticism, questioning whether Tesla's investment decisions are wise.

SpaceX's Bitcoin investment timeline and scale have not been disclosed in detail, but based on current holdings and historical sell-off records, its cost basis may be relatively low. If SpaceX bought in early 2020-2021, the cost could be in the range of $10,000 to $20,000, and the current price of $90,000 implies a paper profit of 4-9 times. This profit margin provides SpaceX with financial flexibility, allowing it to liquidate as needed without incurring losses.

From the perspective of Musk's overall wealth management, Bitcoin is merely a small part of his vast asset portfolio. Musk's primary wealth comes from his stakes in Tesla and SpaceX, valued at hundreds of billions of dollars. Although the $1.6 billion Bitcoin holdings are a large absolute number, they account for less than 1% of his total wealth. This allocation indicates that Musk views Bitcoin as a diversification in his investment portfolio rather than a core asset.

From a tax perspective, Musk may need to adjust his holdings before the end of the year to optimize his tax structure. U.S. tax law allows for capital gains tax reduction through the strategy of tax-loss harvesting. If SpaceX has other investments generating significant gains, it can offset those by realizing some Bitcoin losses (if any). However, based on the current book profit, this motivation seems less valid.

Frequently Asked Questions

Why is SpaceX transferring Bitcoin?

Analysts believe it is a custody strategy optimization, transferring Bitcoin from old Wallets to new, more secure Wallets, or diversifying from a single Address to multiple Addresses to reduce risk. The receiving Address has not been sold yet, indicating non-dumping behavior.

How much Bitcoin does SpaceX hold?

According to Arkham data, SpaceX currently holds about 6,095 Bitcoins, worth approximately $552.9 million. Together with Tesla's 11,509 coins, Musk's companies hold a total of about 17,604 BTC, with a total value exceeding $1.6 billion.

Will SpaceX sell these Bitcoins?

Currently, there are no signs. The receiving address has not transferred Bitcoin to the exchange, and the pattern of transferring to two addresses resembles custody optimization rather than preparation for a sell-off. However, it is necessary to continue monitoring the subsequent movements of these addresses.

Why did SpaceX sell 70% of its Bitcoin in 2022?

A: The cryptocurrency market experienced the collapse of Terra-Luna and the bankruptcy of FTX in 2022, causing market panic to reach its peak. SpaceX and Tesla significantly reduced their holdings during this period, possibly to lock in profits or avoid further losses.

What is Musk's true attitude towards Bitcoin?

Musk publicly stated that he personally prefers Dogecoin, but his company still holds a large amount of Bitcoin. This shows that at the corporate financial level, Bitcoin's status as a store of value is still recognized, even though he personally prefers DOGE as a medium of exchange.

What impact does this transfer have on the Bitcoin price?

The impact in the short term is limited since Bitcoin has not flowed into exchanges. However, if there are signs of movement towards exchanges in the future, it may trigger concerns of a sell-off and suppress prices. Investors should continue to monitor the on-chain activities of receiving addresses.