Investing $1.5 billion in Bitcoin at the beginning of last year, Tesla was betting on the long-term potential of the digital currency. All but 25% of the company’s holdings have previously been sold. The largest electronic currency in the world was given further legitimacy when Tesla Inc. liquidated a sizable portion of its Bitcoin holdings. Approximately 75% of the virtual token that the electric car manufacturer owned was sold.
Buying/Investing into Bitcoins
The maker of electric vehicles said in February 2021 that it had put $1.5 billion into Bitcoin, and in April of that same year it sold 10% of its holdings. Tesla announced on July 20 that the price of its virtual currencies had fallen to $218 million and that an impairment related to Bitcoin had hurt second-quarter earnings.
Selling 75% of the Bitcoin holdings of Tesla
Elon Musk, the CEO of Tesla, has been reversing course quickly after last year’s run-up, when he was a vocal supporter of cryptocurrencies and constantly tweeted about them. During the so-called crypto winter, which lasted for four months, the price of Bitcoin fell by half. In the first quarter of 2021, Tesla’s fair market value for its bBtcoin assets was $2.48 billion, and it was roughly $2 billion towards the end of the year. The price at which the corporation sold the assets or the amount of its impairment were not disclosed, although at the beginning of the second quarter, bitcoin was trading above $46,000 and concluded the period around $19,000.
Why Did Elon Musk Sell Tesla’s Bitcoin?
Elon Musk, the CEO of Tesla, explained the sales motivation as being worries about the firm’s overall liquidity. He went on to clarify that the sale shouldn’t be seen as a verdict on Bitcoin and that the company liquidated the Bitcoin to maximize its cash balance owing to the uncertainties surrounding the Covid shutdowns.
In addition, he…