Elon Musk Sells 75% of Tesla’s Bitcoin Holdings
Elon Musk: Tesla, which made waves last year when it disclosed a major investment in BTC, has now sold 75% of its Bitcoin holdings.
Tesla Sells 75% of its Bitcoin, Crypto Market Reacts
The electric carmaker said it had sold 75% of its Bitcoin holdings, which was worth about $936 million, according to its Q2 earnings report.
The crypto market reacted to the news immediately.
Bitcoin (BTC), which made it above $24,000 on Wednesday, dropped sharply right after markets closed at 4 p.m. Eastern Time. It was trading at $23,078.18 at the time of writing, down 2.5% in the last hour, according to CoinMarketCap.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was also down 3% in the last hour following the news from Tesla’s earnings report.
Read our another article to learn why Elon Musk’s Tesla Sell 75% Bitcoin.
Tesla is backing away as the value of the cryptocurrency has plunged, falling by more than 50% this year.
Tesla said it bought traditional currency with the $936m (£782m) from its Bitcoin sales.
Tesla boss Elon Musk has been among the most high profile champions of cryptocurrency, with his pronouncements on social media often driving significant trading activity.
Tesla’s $1.5bn investment in Bitcoin, revealed in February 2021, prompted a surge of demand in the currency. The price of the notoriously volatile cryptocurrency soared last year to almost $70,000 in November before crashing. One Bitcoin now trades for less than $25,000.
|Download App for Android
|Download App for iOS
Another Broken Promise from Elon Musk
Tesla last year stopped accepting Bitcoin as payment for its cars, citing concerns about the climate impact of energy-intensive Bitcoin mining.
At the time, Elon Musk took to Twitter to outline Tesla’s position on Bitcoin.
“Tesla will not be selling any Bitcoin”. That sounds pretty emphatic.
Yet from the mouth of the world’s richest person, statements should be taken with not just a pinch but a shovel of salt.
We now know that a year after that Tweet, Tesla sold most of its Bitcoin.
You might be noticing a pattern here?
Whether it’s promising driverless tech or buying social media companies, Mr Musk’s pronouncements don’t always come to pass.
That doesn’t seem to have hurt his business career, up to now.
But this is another reminder that his words, which can move markets, are not set in stone.
The move is yet more bad news for Bitcoin and crypto more generally. Musk is an advocate of crypto, and helped hype up currencies like Bitcoin and Dogecoin.
Mr Musk said that this wasn’t a reflection on Bitcoin, and more about the need for cash.
However, he also called crypto a “side show to the side show”. Not exactly a ringing endorsement.
Tesla shared the sale of the holdings as part of its regular quarterly update. It said Bitcoin was one of the factors that hurt its profitability.
However, the company reported higher-than-expected profit for the three months to the end of June as price increases of its best-selling cars helped offset challenges, including lockdowns in China.
It also promised a “record-breaking second half” to the year.
Tesla said production at its China plant rose to a monthly record with Covid-19 restrictions lifted.
Mr Musk also said the company’s newer factories in Germany and the U.S. have seen an increase in output.
Tesla stocks have dropped nearly 40% this year.