Elon Musk’s Tesla has sold 75 percent of its bitcoin holdings to raise cash. The company had previously reported a loss of $106 million on its investment in the digital asset and had hoped to raise an additional $936 million from selling its holdings. However, the company later backed off its decision, citing COVID lock-in in China.
Elon Musk’s Tesla sells 75 percent of its bitcoin holdings
In a tweet shared with the world on Thursday, Elon Musk’s Tesla revealed it was selling up to $736 million worth of Bitcoin. Interestingly, the tweet came only one day after Tesla had announced plans to accept Bitcoin as payment for its vehicles.
That move will be a significant blow to the crypto market, which has been experiencing a massive meltdown as investors grow increasingly skeptical about the US Federal Reserve’s ability to curb inflation.
Elon Musk’s Tesla reported a $106 million loss on its bitcoin investment
Tesla reported a $106 million loss on some of its Bitcoin investments. The carmaker had sold most of its holdings for a profit, but the crypto market collapsed, and the company wiped out those profits.
The company currently has an unrealized loss of $106 million on its Bitcoin investment, according to Tesla’s CFO Zachary Kirkhorn. While the company is currently facing a cash crunch, executives are optimistic about the future of the crypto market.
Tesla raised $936 million in cash by selling digital assets
Tesla has sold about 75 percent of its bitcoin holdings, adding $936 million to its balance sheet. While Elon Musk didn’t say the move was a judgment on Bitcoin, it resulted from liquidity issues in China, which has restricted access to digital assets.
While the company is open to increasing its exposure to bitcoin in the future, it is unclear whether it plans to buy back any of its digital assets.
Tesla backtracked citing COVID lock-in in China
Elon Musk, CEO of Tesla, has kept his opinions about China’s zero-covid policy to himself on Twitter. But Musk has been active on Weibo, with over two million followers. But this time, he didn’t mention the China lockdown or the disruptions this month. However, he told Electrek that it would be a tough quarter.
Take away
A lot of people say that Bitcoin is dead. But if we’re going by what’s happening today, it’s making a comeback on its own without any outside help from governments or financial institutions. It looks like the crypto industry is on track to become mainstream, and with hundreds of new coins available, investors are deciding which ones to invest in. The blockchain is a new way to operate for all industries, and though Bitcoin may not be in the news as much as it once was — it doesn’t mean that it has been forgotten.
Dil Bole Oberoi
