Tesla’s second-quarter financial earnings revealed that the company sold 75% of its entire Bitcoin holdings. The sale of Tesla holdings generated the company $936 million worth of fiat currency.
Elon Musk sells 75% of the company’s Bitcoin holdings
Tesla is one of the largest electric car manufacturers globally. The company has been one of the largest corporate holders exposed to cryptocurrencies. At the time of buying its Bitcoin holdings last year, Tesla had said it wanted to demonstrate the long-term potential of the primary cryptocurrency.
In the Q2 earnings call, Tesla revealed that the sale of the company’s Bitcoin holdings generated revenues of $936 million. However, the company’s CEO, Elon Musk, has said that the sale should not be seen as a verdict on Bitcoin.
In the earnings call, Musk said that the company had sold Bitcoin to meet the production costs in China, which had been affected by the COVID-19 pandemic. The cash needed was raised after the company sold 75% of its Bitcoin holdings.
The news slightly affected Bitcoin, which dropped from around $24K to below $23K. Last year, Musk was one of the largest voices in the cryptocurrency space and even contributed to a massive rally in early 2021 after Tesla announced adding Bitcoin to its portfolio. Tesla had even said it would endorse crypto payments before shutting down those plans due to environmental concerns.
Musk explained the recent sale of Tesla’s largest Bitcoin holdings. He said the company had recorded a steady increase in production costs in China because of the COVID-19 lockdowns. Musk said that selling nearly $1 billion worth of Bitcoin would allow the company to meet production costs.
According to Musk, the sale would allow the electric car maker to meet its cash needs. The cash would be used as capital to support Tesla’s new factories in Germany and the USA. In the past, Musk said that the facilities in Austin and Berlin were “gigantic money furnaces.”
Elon Musk still holds crypto
In the earnings call, Musk revealed that he had not sold any of Tesla’s Dogecoin. The Tesla CEO is a big advocate of Bitcoin. Mid-last year, Musk revealed that he had invested part of his personal wealth in several cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin. In March last year, he said he would not part with his crypto holdings.
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Source: https://insidebitcoins.com/news/tesla-sells-75-of-its-bitcoin-holdings-to-meet-production-costs-in-china