Tesla has sold 75% of Bitcoin, despite Elon Musk’s crypto enthusiasm
Elon Musk is something of an icon in crypto. This is largely due to his association with dogecoin meme, but it’s also because Tesla is one of the most prominent institutional investors in bitcoin. Or at least, it was.
In Tesla’s latest earnings report, released on Wednesday, it was revealed that the company has sold most of its bitcoin. “We have converted approximately 75% of our bitcoin purchases to fiat currency. Calls in Q2 added $963 million in cash to our balance sheet.”
Tesla’s purchase of bitcoin for $1.5 billion, disclosed in an SEC filing last February, contributed to the market euphoria for crypto that caused bitcoin’s price to explode from around $20,000 in December 2020 to $60,000 in March 2021. Tesla’s reserves of Bitcoin at one point reached a value of $2 billion. Tesla originally bought bitcoin to “give us more flexibility to diversify and maximize the return on our cash,” the company’s SEC filing announcing the purchase in 2021 said.
So Tesla has already sold off the inventory, seems to have done so mainly to maintain positive cash flow (not bitcoin-centric reasons), and still has 25% of BTC.
Maybe I can handle it, but seems like a nothing burger.
— Will Clemente (@WClementeIII) 20 July 2022
Elon Musk sells 75% of Bitcoin
3AC and Celsius liquidated
Only bull standing is saylor
— Ash WSB (@ashwsbreal) 20 July 2022
Elon Musk is apparently not trying to hoard Teslas #Bitcoin during the crypto winter. Tesla Dumped 75% of Bitcoin Holdings in Q2. Comp appears to have lost ~$150 million on its cryptocurrency stake since its 2021 purchase, selling $963 million worth of coins. the value of remaining digital assets $218 million pic.twitter.com/pDfUsq6Rm1
— Holger Zschaepitz (@Schuldensuehner) 20 July 2022
Crypto prices have since fallen sharply from the 2021 highs. Bitcoin is down 48% since the start of the year, while ether, the second largest crypto, has fallen 57% since January 1. There is debate over whether Tesla’s bitcoin sale was done out of necessity to maintain cash flow, or whether it reflects failing confidence in bitcoin and crypto in general. Tesla has $621 million in cash, according to Tuesday’s earnings report, meaning it would have been cash-flow negative had it not been for the $936 million bitcoin sale.
Although Musk is championed by the bitcoin and crypto communities, he has previously made statements both asserting and criticizing the technology. “Bitcoin is almost as bs as fiat money. The key word is ‘almost,'” he said in February. “But when fiat currency has negative real interest rates, only an idiot would not look elsewhere.”
After announcing that Tesla would accept bitcoin as payment for its electric cars, Musk backtracked, saying they would stop such payments for environmental reasons. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot have great costs to the environment,” he tweeted.
Tesla was contacted for comment but did not immediately respond.
