On the occasion of the release of its second quarter results, Tesla announces that it has sold 75% of its bitcoin holdings. Elon Musk, the founder of Tesla, assures that this sale is for money and is not a rejection of cryptocurrency.
Between Elon Musk and Bitcoin, this is an eventful adventure. Tesla, a symbol of the power of tech start-ups, was one of the first companies to invest in cryptocurrencies and, in particular, in bitcoin. In February 2021, an American company invested $1.5 billion in the first cryptocurrency, bitcoin.
At the time, Tesla touted the “long-term potential” of these new digital currencies and acted as a catalyst for the market to peak. A year and a few months later, the electric car maker sold 75% of its treasure for $936 million. The company’s current reserves are around $218 million in bitcoin.
China and Bitcoin
Will Tesla become more cautious in the face of “crypto winter”? Elon Musk gave several answers after the publication of the results. “The reason we sold most of our bitcoin holdings is because we didn’t know when the lockdown would ease in China, so it was important for us to maximize our cash position,” the Tesla chief said.
Indeed, even if China banned cryptocurrencies, the Chinese market is extremely important for the electricity producer. Tesla has built a giant factory there, and China is the second largest market after the US by sales.
However, the Tesla boss also does not bury the flagship cryptocurrency. “This should not be seen as a condemnation of bitcoin,” he added.
The sale of his assets probably took place sometime in June. Thus, at the moment the market is not experiencing a serious negative reaction. However, the next few days may tell us more about the market’s ability to withstand this bad news. The speed of the industry forces us to retreat from today’s realities, and as this story shows, a lot can change quickly.