Elon Musk’s Tesla dumps 75% of its Bitcoin a year after endorsing the cryptocurrency making a shockwave throughout the financial sector.
Tesla has liquidated the majority of its cryptocurrency assets after investing $1.5 billion (£1.09 billion) in Bitcoin in February 2021 as a huge media stunt.
Since then, the value of Bitcoin has plummeted, plummeting by more than half this year.
The electric vehicle manufacturer stated that it sold $936 million (£782 million) in Bitcoin in the second quarter.
Tesla CEO Elon Musk stated that the transaction was motivated by worries about his company’s “total liquidity.”
Musk started on Tesla’s earnings call that the key reason for the sale was uncertainty regarding lockdowns in China caused by Covid-19, which has posed manufacturing issues for the firm.
‘It was critical that we optimise our cash situation,’ Musk added.
‘We are certainly open to raising our Bitcoin holdings in the future, so this should not be seen as a judgement on Bitcoin.’ It’s just that we were concerned about the company’s overall liquidity.’
However, it is doubtful to people who trusted Bitcoin and other cryptocurrencies just because of Elon Musk’s endorsement.