Elon Musk’s company has sold most of its cryptocurrency assets.
“Bitcoin rebounded from a short sell-off late on Wednesday, triggered by news that electric car maker Tesla Inc sold about 75% of its bitcoin holdings,” Reuters reported.
Elon Musk, the head of Tesla, said he sold three-quarters of the bitcoins he bought just over a year ago. The sale, which added $936 million to the electric vehicle maker’s balance sheet in the second quarter, according to a letter to shareholders.
Last year, with Bitcoin trading above $28,000, Tesla was on a $1.5 billion trend. After this investment, Tesla CEO Elon Musk said that the company will start accepting payments in cryptocurrency. Shortly thereafter, he reversed the decision, citing concerns about the high level of fossil fuel use for bitcoin mining.
Since then, the company has reportedly lost in value, apparently due to the fall in the cryptocurrency markets. As a reminder, bitcoin fell below $17,700 in mid-June and is down 50% this year. Bitcoin is trading at less than $25,000 today, down from $70,000 last November.
This sale is not fatal
By comparison, 75% of the bitcoin assets sold by a billionaire were worth $2 billion at the end of 2021. Today, the sale of these assets brought Elon Musk $936 million. The company said the value of its remaining “digital assets” is $218 million.
This sale comes at a rather difficult time for Tesla. Indeed, Elon Musk recently reported that the company’s newest factories in Berlin and Texas are losing “billions of dollars right now.” These losses are due to supply chain issues that have blocked production, according to The Guardian. “We are certainly open to more bitcoin holdings in the future. Therefore, this should not be seen as a condemnation of bitcoin. We were just worried about the overall liquidity of the business, given the suspension of work due to COVID in China,” concludes Zachary Kirkhorn, chief financial officer of Tesla.
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