Tesla Sold 75% of its Bitcoins. Does Elon Musk Still Believe in Crypto?
Tesla has announced in its earnings report for the second quarter of the year that 75% of the company’s Bitcoin holdings were sold, leading media reported.
In 2021, Tesla invested about $1.5 billion in Bitcoin (BTC), the largest cryptocurrency by market capitalization. The company sold three-quarters of it for $936 million, making a loss of $189 million.
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Musk stated Tesla has now sold its Bitcoins to improve the company’s cash position
Shortly after buying Bitcoins, Tesla announced it would accept the currency as payment for its vehicles. But shortly after, they revised the decision. At the time, CEO Elon Musk said he would accept Bitcoin for payments again if the blockchain become more environmentally friendly.
At that point, Musk had no plans to sell the Bitcoins owned by Tesla. But that, too, has changed.
Musk stated Tesla has now sold its Bitcoins to improve the company’s cash position in light of the uncertainty surrounding the lockdowns in China. He asserted that his company remains open to buying Bitcoin again in the future.
Some media outlets have considered Tesla’s decision to invest in the world’s largest digital currency as a major milestone for its legitimacy. It was very significant for the crypto industry, as many in the financial world are still skeptical of cryptocurrencies. Some of the criticisms are that Bitcoin and other digital assets are used for illegal activities. One of them is money laundering, especially with NFTs people always talk about so-called wash trading. This involves buying and selling assets to cover up money movements.
Good news for Dogecoin fans
At the financial press conference, Musk assured that Tesla has not sold the Dogecoin (DOGE) owned by the company and does not intend to. The auto giant began accepting DOGE as payment for some items (but not cars) in January of this year and also accepts the coins at some Supercharger stations.
Data suggests Tesla’s digital assets are currently worth $218 million, though the bulk of that is still bitcoin. Musk has hinted in the past that SpaceX could also accept Dogecoin for car purchases at some point.
Reactions from Bitcoin bulls
MicroStrategy Inc, the company with the largest Bitcoin holdings, lost about 4% in after-hours trading on the news. Bitcoins held by the company were worth nearly $3.5 billion less at the end of the second quarter than in the previous quarter.
MicroStrategy CEO Michael Saylor criticized Elon Musk on Twitter for the bitcoin sale, which he sees as hasty. The bear market in recent months has not stopped MicroStrategy from taking advantage of favorable prices and buying more Bitcoins.
In June, Saylor reported that the company had spent another $10 million on about 480 Bitcoins, which equated to an average price of about $20,000 per BTC.
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