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Tesla sells bitcoins

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Tesla sells 75% of its bitcoin to minimize losses

Early last year, crypto fever infected Tesla. The company announced a $1.5 billion investment in bitcoin. Shortly afterwards it upped the ante and allowed its cars to be purchased with this cryptocurrency.

Now the tables have turned. With the global economy in trouble and cryptocurrencies losing much of what they achieved at the end of last year, Tesla has decided to let go. They have sold 75% of the bitcoins they had bought and it seems they no longer trust the cryptocurrency.

Elon Musk’s idyll with cryptocurrencies has had several bumps. His influence on social networks such as Twitter has meant that his comments on this social network have managed to boost the price of bitcoin and dogecoin on several occasions, but for months now the cryptocurrency market has been plummeting.

That investment in bitcoin that Tesla made in February 2021 seemed to make sense: in twelve weeks they managed to earn more money with that investment than in twelve years manufacturing cars.

Things would go further with the rise of the cryptocurrency in the following months, but Musk, theoretically concerned about the energy consumption involved in bitcoin mining, announced in May 2021 that they would stop accepting car purchases with that cryptocurrency.

The fall in value of cryptocurrencies has finally triggered the company’s decision to abandon its positions in this segment. In the presentation of its quarterly results, Elon Musk indicated that the sale was due to the fact that they did not know “when the COVID-19 confinements in China would ease, and it was important for us to maximize our cash position.”

The Tesla creator added that this decision “should not be taken as a verdict on bitcoin,” and commented that Tesla remains open to increasing its cryptocurrency investments in the future.

The sale of these cryptoassets has allowed Tesla to raise $936 million to improve its cash flow. Now the valuation of its portfolio is 218 million according to its officials. Plainly speaking: Tesla has lost $346 million on cryptocurrencies.

The effect on the value of bitcoin has been clear: the cryptocurrency had slightly caught its breath the past few weeks, but that sale seems to have been one of the reasons for a further, albeit less pronounced, drop in its value.

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