Last year, Tesla made headlines across the globe when it announced its major investment in the leading digital currency, Bitcoin. In a swift change of situation, the autonomous car marketer has revealed selling off most of its Bitcoin holdings.
According to the legendary electric car firm, it has sold off 75% of its Bitcoin asset, estimated at $2bn in 2021. Tesla’s stance can be attributed to cryptocurrencies’ free fall over the years, as Bitcoin has lost more than half of its previous value this year.
With proceeds from selling its Bitcoin ($936 or £782m), the electric car maker revealed that it bought traditional currency.
It should be noted that Elon Musk, Tesla’s boss, has been one of the most outspoken proponents of digital currencies, using his influence as one of the world’s richest and most influential men to promote cryptocurrency to its millions of followers across all social media platforms.
In February 2021, it was revealed that Tesla invested $1.5bn in Bitcoin, prompting a surge in demand for the number one digital coin. In November 2021, Bitcoin appreciated to $70,000 per coin before it depreciated. Currently, a Bitcoin sells for below $25,000.
Before the company sold a significant percentage of its Bitcoin asset, it stopped accepting the digital coin as payment for its electric cars last year. The company cited concerns about the possible negative impact of energy-intensive Bitcoin mining on the climate as the rationale behind that decision.
When announcing the decision to stop accepting the most popular digital coin, Musk assured its social media followers that the company won’t sell off its Bitcoin asset. Unfortunately, the successful inventor couldn’t keep its promise as his company disposed of three-quarters of its Bitcoin asset.
Over the years, Musk has advocated a lot of digital assets, including Bitcoin and others. The move to sell off his cryptocurrency is bad news for the cryptocurrency community, especially other investors and traders that consider his opinions on cryptocurrencies as their ultimate investment guide.
While sharing its quarterly update, Tesla announced the sale of its Bitcoin holdings, explaining that investing in the digital coin was one of the factors behind its dropped profitability during the time in question.
However, despite the bearish cryptocurrency market that cost the car company a lot in profitability, it ended the quarter ending in June with higher-than-expected profit, thanks to the increasing demands for its best-selling cars.