Tesla CEO, an electric car manufacturing outfit, Elon Musk early this year sold out the Bitcoin holdings as held by the company, according Elon, it was a decision taken to further boost the company’s cash position following the effect of COVID-19 lockdowns in China.
Having sold a huge holding of the company’s BTC, Elon maintains a strong point that the company could be buying back in the near future.
He said tesla is open to increasing its bitcoin holdings again in the future and noted that the second-quarter sale “Should not be taken as some negative verdict on the flagship crypto asset.”
He made this known in a conference where he featured the company’s earning call last week.
According to Elon at the conference, he emphasized that the sale was mainly “about overall liquidity for the company given COVID shutdowns in China.” However, also mentioned that Tesla did not sell any of its Dogecoin holdings.
Points to note
- It was reported in the second quarter of 2022 that Tesla sold $936m worth of bitcoin, representing 75% of its holdings.
- The company sold its bitcoin for an average price around $29,000 per bitcoin, avoiding a substantial impairment charge by selling earlier in the quarter sine bitcoin ended the second quarter at a price of about $18,700.
- The price of bitcoin initially fell about 1.7% to $23,300 from $24,200, following the release of Tesla’s second-quarter earnings report, which contains news of its sale.
- The average sell price suggests that the company’s sale was the majority reason we saw the massive selling pressure that saw bitcoin fall below $20,000 as more coins dominated crypto exchanges.
- However, this will not go down as the first time Tesla is selling a portion of its bitcoin holdings since it began adding the asset class to its balance sheet. The EVM sold a portion of its BTC reserves in March 2021, realizing a net profit of $128 million.
- At the time, Tesla CEO, Elon Musk noted that the sale, which amounted to 10% of Tesla’s holdings, was to “Prove liquidity of bitcoin as an alternative to holding cash on balance sheet.”