Tesla is selling the majority of its Bitcoin holdings

“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla said in a shareholder letter Wednesday as part of the company’s earnings report. “Conversions in Q2 added $936M of cash to our balance sheet.”

The electric car maker revealed in February 2021 that it had invested $1.5 billion in Bitcoin, then sold 10% of its stake that April. Tesla said Wednesday that its digital assets have shrunk to $218 million and that a Bitcoin writedown hurt second-quarter profitability.

Tesla CEO Elon Musk cited concerns about the company’s overall liquidity as the reason for the sale. He added that the company sold Bitcoin to maximize its cash position due to uncertainty surrounding the Covid shutdowns and that the sale should not be seen as a judgment on Bitcoin. Musk added that Tesla did not sell any of his dogecoin, a meme-based cryptocurrency that he has designated.

Tesla sold $936 million worth of bitcoin in the second quarter, more than a year after the company bought $1.5 billion of the cryptocurrency at the peak of its massive growth and popularity.

Musk has been an outspoken supporter of cryptocurrencies. His statements about the future of crypto and revelations about his ownership of digital assets often increase the price of dogecoin and bitcoin.

Tesla accepted bitcoin as payment for less than two months before stopping in May 2021. Musk had said the company could resume accepting bitcoin once it conducts due diligence on the amount of renewable energy it takes to mine the cryptocurrency.

Bitcoin rallied after a brief sell-off late on Wednesday triggered by news that the electric car maker had sold its holdings of the virtual token. Bitcoin has been in recovery mode so far this week, in line with the stock market, as investors appear more optimistic about the US Federal Reserve’s ability to rein in decades of high inflation.

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