Of its Bitcoin holdings, Tesla Inc. sold around 75% of them.
Tesla Inc. liquidated a large portion of its Bitcoin holdings, a move that helped the biggest electronic currency in the world gain legitimacy. The electric car manufacturer had liquidated nearly 75% of its virtual token holdings.
“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla said in a shareholder letter Wednesday as part of the company’s earnings report. “Conversions in Q2 added $936M of cash to our balance sheet.”
The producer of electric vehicles revealed in February 2021 that it had invested $1.5 billion in Bitcoin. That April, it sold 10% of its holdings. Tesla reported on Wednesday that the value of its digital assets had dropped to $218 million and that a Bitcoin impairment had reduced second-quarter revenue.
Elon Musk, the CEO of Tesla, attributed the transaction to worries about the general liquidity of his business. The company sold the Bitcoin, he continued, in order to maximise its financial position because to the uncertainty surrounding the Covid shutdowns, and the sale shouldn’t be interpreted as a judgement on Bitcoin. Musk noted that none of Tesla’s dogecoin, a meme-based cryptocurrency that he has praised, was sold.
More than a year after investing $1.5 billion in bitcoin at the height of its meteoric rise and popularity, Tesla sold $936 million worth of the cryptocurrency in the second quarter.
Musk has a history of being a vocal proponent of cryptocurrencies. His predictions on the future of cryptocurrencies and admissions regarding his ownership of digital
Before ceasing in May 2021, Tesla accepted bitcoin for less than two months. Musk has previously stated that the business might resume accepting bitcoin after doing its homework on how much renewable energy is required to mine the cryptocurrency.
Following a brief sell-off late on Wednesday caused by rumours that an electric carmaker had liquidated its stakes in the digital currency, bitcoin has since recovered. Similar to the stock market, bitcoin has been on the upswing so far this week as investors grow more confident in the ability of the U.S. Federal Reserve to control the country’s decades-high inflation.
