A representation of the virtual cryptocurrency Bitcoin is seen in this photographic illustration taken on October 19, 2021. REUTERS / Edgar Su / File Photo
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NEW YORK, July 20 (Reuters) – Bitcoin bounced back after a brief sell-off on Wednesday afternoon sparked by news that electric car maker Tesla Inc (TSLA.O) had sold about 75% of their virtual witness shares.
Tesla CEO Elon Musk cited concerns about his company’s “global liquidity” as a reason for the sale.
The world’s largest cryptocurrency rose 1.04% to $ 23,494.57, after falling as much as 0.5% to $ 23,268.92 in the news.
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Tesla sold $ 936 million in bitcoins in the second quarter, more than a year after the company bought $ 1.5 billion of the cryptocurrency at the peak of its massive growth and popularity.
Musk has been an open supporter of cryptocurrencies. His statements about the future of cryptography and revelations about his ownership of digital assets often raise the price of dogecoin and bitcoin.
In Tesla’s profit call, Musk said the main reason for the sale was uncertainty about blockages due to COVID-19 in China, which have created production challenges for the company.
“It was important for us to maximize our cash position,” Musk said. “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as a verdict on bitcoin. It’s just that we were concerned about the company’s overall liquidity.”
Musk added that Tesla did not sell any of its dogecoins, a meme-based cryptocurrency it has promoted.
Tesla accepted bitcoin as a payment for less than two months before stopping in May 2021. Musk has said the company could resume acceptance of bitcoins once it has done due diligence on the amount of renewable energy that you need to exploit the currency.
Bitcoin has been in recovery mode this week, in line with the stock market, as investors seem more optimistic about the US Federal Reserve’s ability to curb high inflation for decades.
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Report by Hannah Lang, Gertrude Chavez-Dreyfuss and Nivedita Balu; Edited by Marguerita Choy, Richard Pullin and Richard Chang
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