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A week later, he credited "our master of currency" and tweeted emojis implying that the corporation has "diamond hands" when it comes to investing in Bitcoin.

Tesla sells 75% of its Bitcoin Holdings and it might not be the smartest thing!

Tesla Inc. (TSLA), a manufacturer of electric vehicles, spent $1.5 billion in Bitcoin at the beginning of 2021, capitalizing on what it saw as the "long-term potential" of the virtual currency. But by mid-2022, the corporation had already sold off about three-quarters of its cryptocurrency holdings. The company stated, "As of the end of Q2, we have converted about 75% of our Bitcoin purchases into fiat currency," when announcing its second-quarter profits on Wednesday.

According to Tesla, the cash generated by such sales was $936 million. For the automaker and its CEO Elon Musk, who was a vocal proponent of cryptocurrencies throughout the run-up to last year and frequently tweeted about different digital currencies, this decision represents a step backward. In what has been nicknamed a "crypto winter," the price of bitcoin has dropped by 50% over the last four months. The fair market value of the EV manufacturer's Bitcoin assets reached $2.48 billion in the first quarter of 2021 and ended the year at nearly $2 billion.

Although the business did not specify the sale price or the amount of the impairment, Bitcoin entered the second quarter at about $46,000 and ended at less than $19,000. Musk made the following statement on his organization's bitcoin policies on Wednesday: "We sold a lot of our bitcoin assets since we were unsure of when the Covid lockdowns in China would end therefore it was critical for us to optimize our cash position. On the results call, when asked about bitcoin's ability to serve as an inflationary hedge, Musk responded that the company's main goal is to hasten the switch to sustainable energy and referred to Bitcoin as "a sideshow to a sideshow."

When Tesla invested heavily in Bitcoin during the first quarter of 2021, the firm claimed the choice was made to be more adaptable, diversify, and earn returns from its cash holdings. As the value of the currency increased, the business swiftly sold 10 percent, making a $101 million profit during that time. Due to the negative effects of mining on the environment, Musk stated in May of last year that Tesla will stop taking Bitcoin for car purchases, but he also stated that the business "will not be selling any Bitcoin." A week later, he credited "our master of currency" and tweeted emojis implying that the corporation has "diamond hands" when it comes to investing in Bitcoin.

Elon Musk is an American industrial engineer and entrepreneur of South African descent. He co-founded Paypal and SpaceX, a provider of aerospace transportation services. Additionally, he was an early investment in Tesla, a manufacturer of electric vehicles, and is currently the company's CEO.

Written By

Petrache Ionut

Jul 25, 2022