According to electric automobile manufacturer, Tesla’s Q2 earnings report, the company has sold 75% of its Bitcoin holdings this quarter. The company sold the coins for $963 million. Tesla stated that the value of its remaining “digital assets” is $218 million. In February of last year, the company revealed that it had purchased $1.5 billion worth of the cryptocurrency with its balance sheet capital and furthermore that it would soon accept Bitcoin as payment for its vehicles. The said announcement sent the crypto markets into a frenzy pushing a number of cryptocurrency prices up and defining Elon Musk as a de facto crypto leader.
Cryptocurrencies Are Experiencing Worldwide Steep Decline
The company’s selloff of Bitcoin holdings 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 standings during the uncertainty of China’s COVID lockdowns. “We are certainly open to increasing bitcoin holdings in the 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.
Tesla Sold its Bitcoin Holdings to Maximize its Cash Position
“The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the Covid lockdowns in China would alleviate so it was important for us to maximize our cash position,” Musk said in earnings call on Wednesday. “This should be not taken as some verdict on bitcoin,” he said, adding that Tesla is open to increasing its crypto holdings in the future.