Tesla Sells Most of Its Bitcoin After Elon Musk Claims Not To Dump

Tesla Inc. sold a significant amount of its Bitcoin holdings, an investment that helped legitimize the world’s largest cryptocurrency.

Tesla Inc. sold a significant amount of its Bitcoin holdings, an investment that helped legitimize the world’s largest cryptocurrency.

The automaker converted about 75% of its Bitcoin to fiat currency at the end of June, adding an additional $936 million in cash to its balance sheet, according to its shareholder letter of second-quarter earnings. Managing director Elon Musk said on a call with analysts that the company sold due to uncertainty about when the Covid shutdown would lift China.

“This should not be seen as some sort of verdict on Bitcoin,” Musk said. “It’s just that we’re concerned about the overall liquidity of the company as Covid stops working in China.”

Musk, 51 years old, emerges as a major influence in electronic money last year, favorable tweet about Dogecoin and post Photograph his dog Floki, like the mascot Dogecoin is a Shiba Inu. When Tesla threw a big party for its new factory in Austin in April, a drone show featured a Dogecoin image.

During an appearance at a Bitcoin conference a year ago, Musk said three things he personally owns besides Tesla and Space Exploration Technologies Corp. is Bitcoin, Ether and Dogecoin. “I can pump, but I don’t pour,” he said.

Tesla first revealed last February that it had invested $1.5 billion in Bitcoin, then announced the sale of its 10% stake two months later. Tesla said on Wednesday its digital assets fell to $218 million, and Bitcoin’s decline in value dragged its profits in the second quarter.

Cryptocurrencies withdrew from record high near $69,000 in November. The largest cryptocurrency by market value traded down 1.1% to around $22,998 at 11 a.m. KST. London.

Musk’s Bitcoin embrace helped act as a catalyst for the digital currency after Tesla briefly accepted the token for purchases. But the company later suspended the payment option, citing environmental concerns about their mining process. The further retracement marks a hawkish move from one of the crypto sector’s most prominent bulls during the so-called “crypto winter”.

However, Musk continues to position himself as a crypto advocate, hinting in recent weeks that SpaceX may be involved. Tesla accept Dogecoin to purchase future goods. The CEO said during the automaker’s earnings call that it hasn’t sold any of its Dogecoins.

Shares of MicroStrategy Inc., another major Bitcoin buyer, fell more than 4% in early Thursday trading. At the end of June, the software company’s own Bitcoin pile was worth about $3.4 billion less than the previous quarter.

Josh Olszewicz, head of research at crypto fund manager Valkyrie Investments, says preliminary estimates will put Tesla Bitcoin sales at around $30,000, with $218 million of the digital asset remaining on the balance sheet.

“Strong bearish market conditions since the start of the year as well as demand for cash on the balance sheet likely contributed to this decision,” Olszewicz said. “From a treasury management perspective, reduced volatility may be too tempting to ignore in the near term.”

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