Elon Musk clarified Tesla’s Bitcoin selling is a temporary move and they still hold Dogecoin.
Electric car manufacturer giant, Tesla reported selling their bitcoin holdings. Overall, Tesla sold bitcoin (BTC) worth approx $936 million. This accounts for about 75% of their entire bitcoin (BTC) holdings. CEO Elon Musk has clarified the reason for this action and said to not take this action as any verdict on Bitcoin.
On Wednesday, Tesla released their earnings reports. In addition to the report, they also released a letter to shareholders where they disclosed the information. It’s the letter that stated that Tesla had sold approx 75% of their bitcoin holdings into cash during the second quarter of 2022. The conversion of BTC into fiat added about $936 million in their cash holdings.
The step of the pioneer car company came in the wake of their efforts to counter several harsh instances that occurred lately. Reports say that Tesla was losing its profits along with facing challenges in keeping the company running smoothly. Company was facing supply chain issues that made them failing to fulfill the demands.
Tesla had to shut down operations at their Shanghai based Gigafactory, given the obligations to pandemic restrictions. This resulted in a huge impact where the production went down by almost 18%. As a result of which, the company managed to produce only 254K units, as per the reports.
Additionally the newly opened companies at Berlin and Texas were also facing issues in their supply chain. Overall this led to minimizing the profits of Tesla during Q2, that remains around $2.26 billion. These issues made Tesla sell bitcoin.
CEO of Tesla—Elon Musk—said that given the uncertainties of pandemic lockdown due to Covid restrictions, the company needed to maintain cash flow. Selling of bitcoin was made to generate cash to reduce the possibility of cash crunch.
While highlighting the cryptocurrencies further, Musk clarifies that crypto does not come as a primary goal for Tesla. The company is about making electric cars and ensuring green energy usage, he added. Selling bitcoin is a temporary move and the company will also look to buy again in future. Musk also mentioned that the company still holds Dogecoin.
As per the reports, Tesla bought Bitcoin worth $1.5 billion in February, 2021. After selling about 10% of the BTC holdings in April, the company had not touched it for about the next three quarters. After the recent selling of bitcoin, Tesla now left with approx $218 million worth bitcoin holdings.
Source: https://www.thecoinrepublic.com/2022/07/21/tesla-sold-bitcoin-worth-over-930mn-elon-musk-blamed-cash-crunch-spared-dogecoin/