Tesla sold $936 million (roughly Rs. 7,500 crore) worth of Bitcoin in the second quarter.
Elon Musk cited concerns about his company's "overall liquidity" as the reason for the sale
Photo Credit: Reuters
Bitcoin recovers after falling on news Tesla sold 75 percent of its holdings
Bitcoin rebounded after a brief sell-off late on Wednesday sparked by news that electric carmaker Tesla Inc had sold about 75 percent of its holdings of the virtual token.
Tesla Chief Executive Elon Musk cited concerns about his company's "overall liquidity" as the reason for the sale.
The world's largest cryptocurrency was last up 1.04 percent at $23,494.57 (roughly Rs. 19,00,000) after sliding as much as 0.5 percent to $23,268.92 (roughly Rs. 18,60,000) on the news.
Tesla sold $936 million (roughly Rs. 7,500 crore) worth of Bitcoin in the second quarter, more than a year after the company bought $1.5 billion (roughly Rs. 12.000 crore) of the cryptocurrency at the peak of its massive growth and popularity.
Musk has been an outspoken supporter of cryptocurrencies. His statements on the future of crypto and disclosures about his ownership of digital assets often boost the price of dogecoin and Bitcoin.
On Tesla's earnings call, Musk said the primary reason for the sale was uncertainty about lockdowns due to COVID-19 in China, which have created production challenges for the company.
"It was important for us to maximize our cash position," Musk said. "We are certainly open to increasing our Bitcoin holdings in future, so this should not be taken as some verdict on Bitcoin. It's just that we were concerned about overall liquidity for the company."
Musk added that Tesla did not sell any of its Dogecoin, a meme-based cryptocurrency that he has touted.
Tesla accepted Bitcoin as payment for less than two months before stopping in May 2021. Musk has said the company could resume accepting bitcoin once it conducts due diligence on the amount of renewable energy it takes to mine the currency.
Bitcoin has been in recovery mode so far this week, in line with the stock market, as investors appear more optimistic about the US Federal Reserve's ability to rein in decades-high inflation.
© Thomson Reuters 2022
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