Crypto

Tesla sold 75% of its bitcoins: the price of cryptocurrency falls

Car firm boss Elon Musk justified the sale with concerns about restrictions in China.

Tesla Inc

Tesla sold 75% of its bitcoins: the price of cryptocurrency falls | Photo Credit: Photo by Afif Kusum on Unsplash

New surprise from Elon Musk. Last night, he revealed that Tesla, the car firm he runs, had sold 75% of its bitcoins. The news had an immediate impact on the price of the cryptocurrency: although it rose to $24,200 on Wednesday afternoon, it then fell to less than $23,000 and has remained just below $23,000 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. “This added $936 million to her balance sheet,” emphasizes Decrypt.

Profit of $106 million

On February 8, 2021, Tesla made public its $1.5 billion cryptocurrency acquisition. This message coincided with the peak of the bull market that began at the end of 2020. Since then, Bitcoin has seen highs (record $69,000 on Nov 10, 2021) and lows ($17,600 low on June 18, 2022).

Bitcoin price in dollars as of July 21, 2022.

Bitcoin price in dollars as of July 21, 2022.

Bitcoin price in dollars as of July 21, 2022.

| Photo Credit: Bloomberg.

However, the electric car maker claims to have received a capital gain of $106 million. This may come as a surprise, since the price of the cryptocurrency has been much lower for several weeks now than at the beginning of 2021, but Tesla could well have bought earlier, at a lower level. According to Decrypt, the average purchase price paid by Tesla is estimated at $31,620 per token, but Bitcoin only finally fell below May 9th.

While Elon Musk is in the midst of a legal battle after pulling out of his takeover of Twitter, his statements leave many questions unanswered: Did he intend to use his bitcoins when he made public his intentions for the social network? Or is he desperately looking for money just when justice might force him to comply with his offer, the total acquisition cost of which is about $44 billion? There is no doubt that his Twitter account will continue to be the subject of everyone’s attention in the coming days, hoping to find an answer there.

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