Tesla Sold 75% Of Its Bitcoin, Musk Remains Open To Buy Again Later
During the company’s Q2 earnings report, the electric car company revealed it has sold 75% of its Bitcoin holdings this quarter. The company sold the coins for $963 million.
Tesla said the value of its remaining “digital assets” is $218 million.
In February of last year, the company announced it had purchased $1.5 billion worth of the cryptocurrency with its balance sheet capital and furthermore that they would soon accept Bitcoin as payment for its vehicles. That announcement sent the crypto markets into a frenzy driving a number of cryptocurrency prices up and cementing Musk as a de facto crypto leader. Later, when he suddenly announced that they were abandoning plans to accept crypto payments, much of that goodwill with the community was reversed.
The company’s selloff comes after a steep decline in the price of cryptocurrencies across the board, including both Bitcoin and Dogecoin, which Musk has personally supported in his social media postings and in his position as CEO of Tesla.
In an earnings call, the company’s executives said the reason for the sale was a desire to maximize cash positions during the uncertainty of China’s COVID lockdowns.
“We are certainly open to increasing bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin. It’s just that we were concerned about overall liquidity for the company given COVID shutdowns in China,” Tesla CFO Zachary Kirkhorn said.
The company’s Q2 earnings report, which beat expectations with $2.26 billion in profit, didn’t affect the stock price much at the time of writing in after-hours trading.
Musk Remains Open to Buying More Bitcoin
Musk said Tesla is open to increasing its bitcoin holdings again in the future, and noted that the second-quarter sale “should not be taken as some verdict on Bitcoin,” emphasizing that “we were concerned about overall liquidity for the company given Covid shutdowns in China.”
Tesla did not sell any of its Dogecoin (DOGE) holdings, Musk also said on the conference call.
Tesla sold its bitcoin for an average price of around $29,000 per bitcoin, avoiding a substantial impairment charge by selling earlier in the quarter, since bitcoin ended the second quarter at a price of about $18,700.
The price of bitcoin initially fell about 1.7% to $23,300 following the release of Tesla’s second-quarter earnings report, which contained news of its sale. But it recovered those losses after Musk’s comments on the earnings call.
