Tesla Inc. sold a significant part of its Bitcoin, an investment that helped legitimize the world’s largest electronic currency.
Tesla had converted roughly 75% of its Bitcoin to fiat currency as of the end of June, adding $936 million of cash to its balance sheet, according to its shareholder letter on second-quarter earnings. Elon Musk said on a call with analysts that the company sold its Bitcoin because of uncertainty about when China would lift the lockdown.
In an interview, he said, “This should not be taken as some verdict on Bitcoin. It’s just that we were concerned about the company’s overall liquidity given the Covid shutdowns in China.”
Musk emerged as a major influencer in cryptocurrency last year after tweeting favourably about Dogecoin and posting photos of his dog Floki, which is a Shiba Inu like the Dogecoin mascot. Also, a drone show at Tesla’s Austin factory featured a Dogecoin image.
At a Bitcoin conference last year, Musk said the three things he personally owned aside from Tesla and Space Exploration Technologies Corp. were Bitcoin, Ether and Dogecoin. “I might pump, but I don’t dump,” he said.
Tesla announced in February last year that it had invested $1.5 billion in Bitcoin and disclosed it had sold 10% of its stake two months later. Tesla said Wednesday its digital assets have shrunk to $218 million and that a Bitcoin impairment dragged on profitability in the second quarter.
Musk’s embrace of Bitcoin served as an incentive for the digital currency after Tesla briefly accepted the token for purchases. However, this payment option was later suspended by the company as a result of environmental concerns.