- Tesla has sold 75 percent of its massive bitcoin stake, the company said Wednesday.
- In 2021, it spent $ 1.5 billion on cryptocurrency, in an unprecedented move for a company of its size.
- Bitcoin has lost more than half of its value this year.
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It looks like Tesla is abandoning its ten-digit bitcoin bet amid a sharp drop in cryptocurrency markets.
The electric car maker said Wednesday it has sold about 75 percent of its bitcoin on June 30th. He said he converted $ 936 million of the cryptocurrency into fiat between April and June.
Tesla made waves – and shot up the price of bitcoin – when it announced a $ 1.5 billion investment in cryptocurrency in February 2021. A company the size of Tesla that bet so much on the growing cryptocurrency market and volatile was unprecedented. Tesla maintained much of its stake as bitcoin soared to new heights in late 2021.
But the value of bitcoin has plummeted since then amid a wider economic recession. The currency has lost more than 50% of its value this year and made another sharp dip on Wednesday afternoon following Tesla’s announcement.
At a conference call Wednesday, CEO Elon Musk said sales were due to uncertainty over COVID-19 restrictions in China. A coronavirus blockade in Shanghai severely limited Tesla’s ability to produce vehicles at its factory there, reducing its overall sales during the quarter.
“We weren’t sure when the Covid blockades in China would be eased, so it was important for us to maximize our cash position,” he said. “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as a verdict on bitcoin.”
Musk added that Tesla still has Dogecoin, a cryptocurrency that started as a joke and that Tesla accepts as payment in its online store.
The automaker said it still has $ 218 million in “digital assets” as of June 30, down from $ 1.26 billion at the end of the previous quarter. He justified his initial purchase by saying he was looking for liquid assets that had more advantage than cash.
Tesla reported second-quarter earnings on Wednesday, surpassing analysts ’estimates but recording its first drop in earnings from quarter to quarter.