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Even Elon is fed up with bitcoin. After months of bleakness in the crypto market, the Tesla CEO has decided to dump the majority of the company’s digital asset holdings.
In its Q2 2022 earnings report, Tesla revealed that it sold 75% of its bitcoin position, which added US$963 million in cash to its balance sheet.
Tesla had purchased the bitcoin for just over US$1.1 billion towards the start of last year, resulting in a loss of over US$100 million. Around US$300 million worth of bitcoin still sits on the company’s balance sheet.
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In March 2022, Musk had pledged to not sell his Bitcoin, Ethereum or Doge. Bitcoin has fallen over 42% since his tweet and is down over 66% from its 2021 highs.
On Tesla’s earnings call, Musk cited uncertainty surrounding lockdowns and COVID in China for the sale.
News of Tesla’s bitcoin shedding sent the cryptocurrency’s price down, erasing its gains for the day, though it has since recovered. Meanwhile, Tesla’s stock price is up 1.5% in after hours trading to reach US$753.30.
As a longtime backer of cryptocurrencies, especially bitcoin, Musk’s drastic move doesn’t inspire confidence for other institutional crypto backers. The message could be a signal to other institutions to follow suit, adding to the ongoing market FUD.