elon musk: Tesla sells 75% of Bitcoin holdings, expert says Musk didn’t feel like it

Tesla Inc has cut its Bitcoin stake by a quarter, the renowned electric car maker revealed in its results for the quarter ended June 2022.

In a shock to the crypto world, Elon Musk’s company revealed that it has converted about 75 percent of its Bitcoin holdings into fiat currency, adding about $963 million to its balance sheet.

However, the auto major had announced in February 2021 that it had invested around $1.5 billion in Bitcoin, but then sold 10 percent of its stake in April, just two months later.

Tesla also mentioned that its crypto holdings have now fallen to $218 million, Bitcoin write-down hurt second quarter profitability. The announcement weighed on the crypto market, which saw solid gains after the recent rally.

Tesla CEO Elon Musk said on the earnings call that the company sold Bitcoin to maximize cash due to Covid-related uncertainty. He added that the sale should not be seen as “a judgment on Bitcoin.”

However, the clarification from the mercurial technocrat didn’t help crypto sentiment much, as the numero uno crypto asset, which was at the $24,200 mark on Wednesday, plunged over 6 percent to $22,700 levels on Thursday.

On Thursday, the token struggled to regain the $23,000 level at 1:30 pm IST, with its total market cap falling below $450 billion and volumes plunging around 9 percent to $43.25 billion, according to Coinmarketcap data.

The selling of Elon Musk has hurt crypto sentiment as the mercurial technocrat has been a staunch supporter of digital assets, but there is no denying that he has always favored Dogecoin over Bitcoin.

Edul Patel Co-Founder CEO of Mudrex said his fancy for Dogecoin is not new. “Following this sale, Musk took to Twitter to say that Tesla had not sold any of its Dogecoin holdings, which could further trigger the price of the largest memetoken.”

Prior to this, Musk had criticized Bitcoin citing the negative impact of Bitcoin mining on the environment. His company stopped accepting Bitcoin last year, but continues to accept Doge for merchandise.

One should not forget that crypto has been the worst performing asset class in the year 2022. Bitcoin has lost about two-thirds of its value from its peak of $67,800, hit in November 2021.

Even the total market cap of all crypto assets has plunged close to $1 trillion, which was around $3.1 trillion during its golden days.

Sathvik Vishwanath Co-founder CEO Unocoin said there is nothing to be surprised about here. “At the end of the day, investing is just about creating additional wealth”

“So when one identifies that it would be a loss-making proposition, they tend to exit and re-enter at a future date,” he added.