Tesla liquidates 75% of its Bitcoin (BTC) holdings

Wednesday, You are heremanufacturer of electric vehicles, revealed that it sold 75% of its Bitcoin holdings in the second quarter for $ 936 million.

Source: Adobe

This information has slightly affected Bitcoin’s performance: the first cryptocurrency on the market, whose price had briefly exceeded the $ 24,000 threshold, is currently trying to stabilize at around $ 23,000.

During a “conference call” with investors, CEO of Tesla, Elon Muskhad explained that this operation “should not be considered as a judgment on Bitcoin”, adding that this strategic decision was due to liquidity problems given the persistent Covid-related blockades in China:

“We are certainly open to increasing our Bitcoin holdings in the future.”

Asked by investors if he sees Bitcoin as a long-term asset, Musk reportedly replied that cryptocurrency is a subordinate and secondary issue to Tesla’s primary goal, which is “to accelerate the emergence of renewable energy. Musk also noted that Tesla did not sell their Dogecoin holdings.

Either way, insiders in the crypto industry are hardly worried about Tesla’s move, as they believe it’s a classic corporate strategy to improve cash flow during an economic downturn.

Markus Thieleninvestment manager at IDEG, a Singapore-based digital asset manager, told Cointelegraph that Tesla probably sold its bitcoins because cryptocurrency is not the company’s core business and was likely seen as a “distraction.” He added that he would not be surprised if Tesla continues to stockpile bitcoins once the price stabilizes.

In April 2021, Tesla made a similar strategic move for the same reasons and continued to sell 10% of its Bitcoin assets. The company’s CFO, Zachary Kirkhornhad highlighted the benefits that cryptocurrency offers in terms of liquidity management and liquidity: according to him, Bitcoin proved to be an excellent investment for liquidities that were not immediately used to achieve a certain return on investment in an uncertain economic environment.

The announcement of the introduction of Bitcoin in Tesla’s balance sheet and then the acceptance of Bitcoin as a means of payment had caused a lot of ink to flow in the media and the cryptosphere. They had also slung the Bitcoin price to a new ATH (all time high). Referring to environmental concerns, Musk later reversed his decision and decided to suspend Bitcoin payments. Tesla’s CEO continues to ‘troll’ the cryptoecosystem and take a vague stance on the subject (with the notable exception of his favorite cryptocurrency, Dogecoin).

Despite Musk’s twists and his approach to bitcoin supporters, the movement continues to mark the traditional financial industry, prompting many companies to consider adding bitcoins to their balance sheets.

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