Tesla CEO Elon Musk said that his company’s decision to sell most of its Bitcoin holdings should not be taken as a general decision about cryptocurrency. Here are the details…
Elon Musk shared his comments on Bitcoin sales
As we reported on Kriptokoin.com, the leading e-car manufacturer sold $936 million worth of Bitcoin in the second quarter. Musk explained that Tesla had to liquidate its assets due to concerns over the company’s overall liquidity due to shutdowns in China. Billionaire also said that the company is open to increasing Bitcoin holdings in the future. The Tesla boss also revealed that the e-car manufacturer is not selling any of its Bitcoin assets. Musk also criticized Bitcoin during the earnings call. He claimed that he did not contribute to an environmentally sustainable future. “Cryptocurrency is a sideshow of a sideshow. We don’t think too much about it,” he said.
Last May, Tesla stopped accepting Bitcoin due to climate concerns. This caused a major correction in the price of the coin and the overall market. The world’s largest cryptocurrency fell to $22,650 after Tesla’s U-turn. At the time of writing, the cryptocurrency remains below the $23,000 level and is losing momentum. Bitcoin is still around 48 percent below its record high. The cryptocurrency’s decline is mainly linked to the Fed’s attempts to curb inflation. The central bank is expected to announce another rate hike this month. During the earnings call, Musk said he expects inflation to fall by the end of the year.
What had happened?
According to Tesla’s second-quarter 2022 earnings report released Wednesday, the automaker has sold almost all of its Bitcoin for fiat currency. The sale provided the company with an additional $936 million in cash for its balance sheet. According to the report, Tesla “converted approximately 75 percent of Bitcoin purchases to fiat currency” by the second quarter of 2022. “2. Conversions in the quarter added $936 million in cash to our balance sheet”.
The company initially purchased $1.5 billion worth of Bitcoin in February of 2021. Thus, it gave impetus to a fiery bull market. However, the company stopped accepting Bitcoin for car payments in May of last year due to environmental concerns surrounding Bitcoin mining. The CEO of the company, Elon Musk, has since revealed that he likes Dogecoin more, which he thinks is better for transactions.
Musk confirmed last July that he personally owns Bitcoin, Ethereum, and Dogecoin. The CEO claimed that Tesla could continue to accept Bitcoin again if it could confirm that the mining industry is moving towards renewable energy. The Bitcoin Mining Council’s second quarter 2022 report found that 59.5 percent of the mining industry is operating with sustained power. This is the fifth consecutive quarter where the figure is over 50 percent.
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