Thursday, July 21st, 2022 | Cryptostotle #12 | By: Brad Lathrop
Tesla sold 75% of its Bitcoin holdings over the second quarter of the year, which resulted in $936M added to their balance sheet.
Back in February 2021, Elon Musk and Tesla purchased $1.5B in bitcoin in order to add “more flexibility to further diversify and maximize returns on our cash.”
Today, Tesla holds just 25% of its original investment.
Musk gave his reasoning during Tesla’s earnings call yesterday, which you can listen to here.
During the Q&A session of the call, Elon Musk explained why Tesla sold 75% of its Bitcoin holdings (I quoted this from the actual call):
“It should be mentioned that the reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the covid lockdowns in China would alleviate so it was important for us to maximize our cash position given the uncertainty of the COVID lockdowns in China. 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 over liquidity of the company given COVID shutdowns in China, and we have not sold any of our Dogecoin. We still have our Dogecoin.” – Elon Musk
So in a nutshell, Tesla sold bitcoin to maximize their cash position due to uncertainty in China, and that this move should not be taken as a negative “ruling” or “conclusion” towards the prominent cryptocurrency.
On a related note, the Wall Street Journal noted yesterday that the prominent electric car company “reported its first sequential decline in quarterly profit in more than a year as it navigates global economic turmoil and recovers from an extended shutdown at its Shanghai assembly plant.”
