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Musk takes U-turn, sells 75 percent of Tesla's Bitcoin holdings to improve cash position

Musk takes U-turn, sells 75 percent of Tesla's Bitcoin holdings to improve cash position Image
  • Posted on 21st Jul, 2022 21:22 PM
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Musk takes U-turn, sells 75 percent of Tesla's Bitcoin holdings to improve cash position Elon Musk’s Tesla has revealed it sold a majority of its Bitcoin holdings to increase liquid assets as the automobile gives in to the economic downturn. In a letter to investors, Tesla executives said that at least 75 percent of the

Elon Musk’s Tesla has revealed it sold a majority of its Bitcoin holdings to increase liquid assets as the automobile gives in to the economic downturn. In a letter to investors, Tesla executives said that at least 75 percent of the company’s investment in Bitcoin has been offloaded to add $936 million in cash to the balance sheet. The sold volume could have raked in around $2 billion in 2021 before the decline in the crypto market. Also Read - Tesla getting closer to integrating Steam for in-car gaming: Check details

As a promoter of cryptocoins, Musk announced in February that Tesla had invested heavily in Bitcoin, as well as other tokens, including Dogecoin, which Musk dearly vouches for. Last year, Tesla invested $1.5 billion in Bitcoin, causing a surge in the demand. Bitcoin rallied to almost $70,000 in November last year before crashing. But Tesla did not heed that. Also Read - Tesla will lower price for cars if inflation calms down: Elon Musk

Earlier this year in March, Tesla introduced Bitcoin as a mode of payment for its cars in eligible markets. But about 50 days later, it realised the highly volatile Bitcoin was not turning out to be viable for the business. It reversed its decision, due to the plummeting value of Bitcoin and other crypto coins. At the time, Musk said on Twitter that Tesla would not be selling the Bitcoin it owned. But Musk is notorious for not keeping his word. In April, Tesla sold 10 percent of its stake. Also Read - Twitter sues Tesla CEO Elon Musk for trying to back out of $44 billion deal

In the latest filing, Tesla highlighted that the value of the remaining digital assets has come down to $218 million from about $1.2 billion in the last few quarters. But Musk has not changed his stance on cryptocurrency. Addressing the selloff, he said Tesla liquidated its Bitcoin holdings because the company was “concerned about overall liquidity of the company given COVID shutdowns in China.” He also confirmed that Tesla has not sold any of its Dogecoin.

Tesla’s profit this quarter has decreased from last quarter. It reported it made $2.26 billion in profit — a 31 percent decline from $3.3 billion in the previous quarter. The revenue also dropped from $18.7 billion in Q1 to $16.9 billion, per the latest earnings report.

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