Elon Musk’s Tesla Offloads 75% Of Its Bitcoin Stash

Musk noted that the firm will likely increase its BTC holdings in the future.
Elon Musk's Tesla Offloads 75% Of Its Bitcoin Stash

After boasting of its “diamond hands” in the past amidst the ups and downs of the crypto markets, Elon Musk’s Tesla has dumped about three-quarters of its Bitcoin (BTC) holdings, as officially revealed by the electric vehicle company. This comes at a time when the firm is facing some hurdles in its cash flow system.

Tesla sold its BTC holdings to add $936M in cash to its balance sheet

The move was revealed in Tesla’s Cash Flow Statement of Q2 2022 which indicated that the conversion of 75% of its BTC holdings to fiat currency helped mitigate the firm’s alarming cash flow situation by adding $936M of cash to its balance sheet.

Following the decision which comes at a time when the crypto markets are predominantly plagued by the enduring bear market, several crypto enthusiasts and notable personalities in the space have pondered if the firm panic sold its holdings amidst the growing pressure mounted by the Crypto Winter or if the move was purely influenced by its Cash Flow situation.

With a net profit of $2.2B as revealed on Wednesday, Tesla’s second-quarter performance had fallen by a concerning 32% margin from the first quarter of the year. Alongside the macroeconomic conditions that have plagued the financial space, Tesla has also faced its unique challenges – the company had to temporarily shut down its Shanghai Gigafactory due to China’s ongoing COVID-19 restrictions.

Elon Musk notes that the move was purely due to their Cash Flow situation

Shortly after reports of the BTC sale, CEO Elon Musk cleared the air on the reason behind the decision. On a conference call, Musk noted that the move was not influenced by the crypto markets. “The reason we sold a bunch of our BTC holdings was that we were uncertain as to when the COVID lockdowns in China would alleviate,” said Musk, “So it was important for us to maximize our cash position.”

Musk noted that the firm will likely increase its BTC holdings in the future. Nonetheless, when asked if the firm sees BTC as an investment in the long term, he mentioned that cryptocurrencies in general are not something the company focuses on. In February of 2021, Tesla purchased BTC worth $1.5B; an SEC filing earlier this year showed that the firm had BTC worth close to $2B as of Dec. 2021.

While Tesla is selling off its BTC, noting that it doesn’t particularly focus on the asset class, Michael Saylor’s MicroStrategy appears to have remained bullish on the firstborn crypto. In late June, the business intelligence firm revealed that it had bought an additional 480 BTC between May 3 and June 28 when the crypto markets were at their most challenging phase. The firm now holds 129,699 BTC, making it the largest institutional holder of the asset.

Risa Skyes
Skyes is a Senior Editor at CoinJot with a remarkable passion for Blockchain, Crypto, Metaverse, NFTs, and All things Web 3.0. Risa.Skyes [at] coinjot.com