The value of Bitcoin drops as Tesla sells the majority of its BTC holdings.
Tesla made waves last year upon revealing a massive investment in BTC. However, the company has now sold off the majority of its holdings. The firm offloaded about 75% of its BTC, valued at $2 billion at the end of 2021.
Following the plummet in the value of BTC, the company is now backing away. The company stated that it bought traditional currency with the funds made from the sales, roughly $936 million. Boss Elon Musk was among the high-profile champions of digital assets, one whose comments on social media could drive significant activity.
In fact, the announcement of the $1.5 billion investment in BTC, revealed initially in Feb 2021, resulted in a surge in demand for the cryptocurrency. The price of bitcoin soared over the following months, nearing $70,000 in November 2021 before it started to fall.
The Reality of Today: Another Promise Broken?
Last year, Tesla stopped accepting the crypto asset as payment for vehicles. The company cited concerns about the energy-intensive mining method’s impact on the climate. At that time, Musk took to social media with claims the company would not sell the Bitcoin it held.
“Tesla will not be selling any Bitcoin,” Musk proclaimed as he laid out the company’s plans for the asset. A year later, the company has now sold most of its holdings.
Clearly, words and statements are not set in stone. However, they do have the power to move markets.
This is yet another blow against Bitcoin and cryptocurrencies overall. Still, Musk stated that this exchange is not a reflection on Bitcoin so much as a need for funds. However, this comes amidst statements calling crypto a sideshow to the sideshow.
The Sale By Tesla
The reveal of the sale came through Tesla’s quarterly update, in which the company claimed that Bitcoin was a factor hurting its profitability. However, by the end of June, the company reported profits at a level higher than expected.
In part, this is likely due in part to the price increases of the vehicles to offset economic challenges. Additionally, the company promised record-breaking numbers for the second half of the year. This comes among statements that production in China rose to a new record as the country lifted COVID-19 restrictions.
Musk also stated that output increased at newer factories in Germany as well as in the United States. Previously, Musk had referred to these facilities as “gigantic money furnaces.”