Crypto industry experts are largely unfazed by Tesla’s decision to sell 75% of its Bitcoin (BTC) holdings, saying it’s a fairly typical strategy for companies to improve cash flow during economic slowdowns.
On Wednesday, the electric vehicle manufacturer revealed that it had sold 75% of its Bitcoin holdings in Q2, adding $936 million in fiat to its balance sheet.
During a conference call, Tesla CEO Elon Musk noted that the sale “should not be taken as a verdict on Bitcoin,” explaining that the move was due to liquidity concerns given the continued Covid lockdowns in China.
“The reason we sold a bunch of our Bitcoin holdings was that we were uncertain as to when the Covid lockdowns in China would alleviate. So it was important for us to maximize our cash position.”
“We are certainly open to increasing our Bitcoin holdings in the future.”
Asked by investors during the earnings call whether he saw Bitcoin as a long-term asset, Musk said the cryptocurrency was a “sideshow to the sideshow” of Tesla’s main goal, which is “to accelerate the advent of stable energy.”
“Cryptocurrency is not something we think of a lot,” he said.
Markus Thielen, chief investment officer at Singapore-based digital asset manager IDEG told Cointelegraph that Tesla likely sold off its Bitcoin as it was “seen as a distraction from their core business.”
“I would not be surprised if Tesla keeps nibbling in Bitcoin when Bitcoin stabilizes, otherwise they would have sold 100%.”
Comparison site Finder’s share trading expert Kylie Purcell explained that the electric car manufacturer hasn’t been alone in its decision to “shore up capital in cash currencies.”
“With the world heading into an economic slowdown and possibly a recession, it’s not unusual for investors and companies to move capital away from more volatile assets into fiat currency,” she noted.
She also added that while the price of Bitcoin dipped following the announcement, there are already signs of recovery.
On Wednesday, Bitcoin’s price fell approximately 2.6% following Tesla’s…