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Elon Musk intends to sell 10% of his Tesla stock – Is it to buy more Bitcoin?

Billionaire Elon Musk is known for his unconventional thoughts and most recently he asked on Twitter whether he should sell 10% of his Tesla stock and promised “to follow the results of this poll, whichever way it plays out”. He tweeted:

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock”.

This is not the first time Musk has targeted proposals to tax the net worth of billionaires in Washington. Under current US tax law, assets such as stocks are taxed only when they are sold – known as capital gains. But the richest of the rich in America are probably not selling off their huge stock portfolios; instead, their primary form of income is the value those assets have accrued or unrealized.

Last month, Musk pointed to a Democratic proposal to tax billionaires, saying it represents the beginning of a new campaign from the left to redistribute wealth from the richest people in the United States.

Musk’s net worth this year hit the $335 billion mark as Tesla shares skyrocketed to more than $1,000/unit. By far, he is the richest person in the world, according to a Bloomberg tracking index.

When unrealized earnings are counted as income, billionaires pay an average income tax of 8.2%, much lower than the average American.

Meanwhile, a new analysis conducted by economist Gabriel Zucman shows that Musk could face up to $50 billion in taxes over the first five-year period if the billionaire tax is passed.

Will Musk buy more Bitcoin?

Musk’s latest tweet received more than 1 million votes, with 54.2% of participants voting Yes to the proposal.

Bitcoin and crypto investors are also very interested in this proposal of the billionaire.
Some asked Musk to reinstate BTC payments for the company’s products, others were excited that the news could be a “bullish” sign for the crypto market.

Financial analyst Kevin Paffrath points to four factors to consider to determine if Musk wants to buy more Bitcoin.

  • Firstly, Musk will be inclined to shift money from cash into other assets due to “inflation concerns.”
  • Secondly, Bitcoin might be one of his biggest investments right now.
  • Thirdly, since Musk has sold all of his real estate, it doesn’t seem likely that he will pour money into it anymore.
  • Finally,  “We hope Tesla will return to accepting BTC. I think $12-13 billion is going into crypto. I see Musk being a bit more cautious with the dollar so I’m betting on BTC.”

MicroStrategy CEO Michael Saylor commented on Musk’s tweet:

“If the goal is diversification, an alternate strategy to consider is converting the TSLA balance sheet to a Bitcoin Standard and purchasing $25 billion in BTC. That would deliver diversification, inflation protection, & more upside for all investors in a tax efficient manner.”

Bitcoin is trading at $61,974 and is up nearly 2% in the past 24 hours.

Source: TradingView

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