Crypto

Tesla boss Elon Musk sold 75% of his bitcoins

Testa has returned most of its cryptocurrency assets

Tesla, which made a splash last year by announcing a major investment in bitcoin, has now sold most of its cryptocurrency holdings.

The electric car company has dumped 75% of its bitcoin, which was worth about $2 billion (£1.7 billion) at the end of 2021.

It is retreating as the value of the cryptocurrency has fallen by more than 50% this year.

Tesla said it bought $936 million (£782 million) worth of traditional currency from the bitcoin sale.

Tesla boss Elon Musk sold 75% of his bitcoins

Tesla boss Elon Musk has been one of the biggest supporters of cryptocurrencies, and his social media pronouncements have often led to heavy trading activity.

Tesla’s $1.5 billion investment in bitcoin, revealed in February 2021, has sparked a surge in demand for the currency. The price of the infamous volatile cryptocurrency soared last year to nearly $70,000 in November before crashing.

The news had an immediate effect on the price of the cryptocurrency: although it rose to $24,200 on Wednesday, July 20, 2022, it then fell to less than $23,000 and has remained slightly lower ever since.

“The reason we sold most of our bitcoin holdings was because we didn’t know when Covid-related restrictions would be eased in China,” he said during the company’s quarterly earnings announcement. Therefore, it was important for us to maximize our liquidity. »

Last year, Tesla stopped accepting bitcoin as payment for its cars, citing concerns about the climate impact of energy-intensive bitcoin mining.

At the time, Mr. Musk stated on social media that the company would not sell the bitcoins it owned.

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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