Tesla Dumps Three-Quarters of its Bitcoin Holdings

Updated by Geraint Price
In Brief
  • Tesla invested $1.5 billion in BTC in Feb 2021.
  • However, the car producer revealed that it has now sold 75% of its holdings.
  • Musk said he is not against the idea of re-accumulating BTC.
  • promo

    Bnext Launches Its Utility Token on Gate.io Read Now

Tesla, which just over a year ago rocked the financial world by making a major investment in bitcoin (BTC), has backtracked and sold 75% of its holding. 

The Elon Musk-led company invested  $1.5 billion in BTC in Feb 2021, but ended up liquidating three-quarters of the purchases for $936 million in the second quarter of this year.

Source: BTC Treasuries

Tesla dumping weakened BTC recovery

The news also weakened bitcoin’s recovery, sliding under the $23,000 mark, according to CoinGecko. However, soon after, it began to regain momentum and is trading close to the crucial level at press time.

Musk said he is not against the idea of re-accumulating BTC. Musk was quoted by Reuters as saying: “It was important for us to maximize our cash position… We are certainly open to increasing our 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.”

On Tesla’s earnings call, the company reportedly emphasized that the BTC sale in exchange for fiat currency was on the back of COVID-19 lockdowns in China, which created uncertainty for the car producer. 

“It’s just that we were concerned about overall liquidity for the company given COVID shutdowns in China,” Tesla CFO Zachary Kirkhorn said.

Has Tesla’s crypto bet failed?

Be[In]Crypto reported earlier this month that Tesla’s investment in bitcoin faced a decline of $440 million as the market began to slide earlier this year.

While bitcoin started April trading around $45,000, it spiraled down to $20,000 by the end of June. Tesla’s selling price was not disclosed.

Reports suggest that Tesla seems to have lost around $150 million on its crypto bet, with the company noting that the value of its remaining “digital assets” is $218 million.

Tesla suspended bitcoin payments in May 2021 on the back of environmental concerns associated with Bitcoin mining, shortly after allowing the coin as an option. 

Meanwhile, Musk has hinted on several occasions that he intends to continue supporting Dogecoin.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.