Electric vehicle manufacturer Tesla announced that it has sold most of its bitcoin holdings during the second quarter of 2022. Tesla is one of the largest holders of bitcoin tokens, so any move by it strongly impacts the price of the cryptocurrency in the market.
“As of the end of Q2, we have converted approximately 75 % of our Bitcoin purchases into fiat currency. Conversion in Q2 added $936 million of cash to our balance sheet,” read Tesla’s financial report.
In November 2021, Tesla became one of the largest holders of bitcoin when it invested more than $1.5 billion in the cryptocurrency. The purchase was disclosed to the Securities and Exchange Commission (SEC) in February.
According to its financial statements, by the end of March Tesla had about $1.261 billion in digital assets within its portfolio. After the massive liquidation in the second half of the year, the electric car maker has reduced its exposure to less than $218 million.
Tesla began selling its bitcoin holdings in March, when it announced that it sold about 10% of its holdings, realizing a gain of $128 million. At the time of its sale, the electric carmaker’s CEO, Elon Musk, explained that the sale was done to demonstrate bitcoin’s liquidity as an alternative to holding cash on the balance sheet.
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At a recent conference, Musk clarified regarding the latest sale “should not be taken as a verdict on bitcoin.”
“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,” Musk explained at the same meeting.
“We are certainly open to increasing our Bitcoin holdings in the future,” the CEO stated to then clarify that “cryptocurrencies is not something we think of a lot,” as the company’s priority is to “to accelerate the advent of stable energy.”
Currently, a bitcoin token is around $22,000, the cryptocurrency during the month of July has been recovering after touching its lowest point since November 2020, when it fell below $19,000.