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Tesla sold bitcoin – because of COVID in China

Tesla sold bitcoin - because of COVID in China

Tesla sold bitcoin. During the final balance sheet press conference, Tesla boss Elon Musk said: This move serves to maximize Tesla’s cash position.

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Tesla sells bitcoin

During today’s Tesla Earnings Call, Tesla CEO Elon Musk explained the reasoning behind the sale of 75% of Bitcoin holdings, valued at approximately $936 million, according to the company’s Q2 Earnings Report. Musk on the conference call:

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“The reason we sold some of our bitcoin holdings is because we weren’t sure when the COVID lockdown in China would ease. Therefore, it was important for us to maximize our cash position given the uncertainty surrounding the COVID lockdown in China.”

Although China eased COVID restrictions in major cities in late May, a spike in cases in Beijing and other key regions prompted the government to reintroduce the regulations a few weeks later. Mass testing and a lockdown was implemented in Shanghai earlier this month.

As a result, China’s “zero-COVID policy” will be put to the test again. The result is new warnings of major economic shocks.

For example, Reuters reports that the world’s second largest economy posted a sharp decline in industrial production and consumer spending in the second quarter from the first quarter.

Tesla is sticking with Dogecoin

In Tesla’s conference call, the company explains: Telsa has converted most of its bitcoin holdings to fiat for a realized gain. That took $106 million off the income statement (P&L). They are included in the restructuring costs associated with the targeted staff reduction.

Despite the sale, Musk emphasizes that Tesla is willing to increase its BTC holdings in the future. It should not be understood as a judgment about Bitcoin, according to Musk – and he adds: Tesla did not sell any Dogecoin.

In a subsequent question-and-answer session, Musk said that the company is not thinking much about cryptocurrency. Rather, it is a “sideshow of the sideshow” – after all, the core business is somewhere else.

Musk emphasizes that Tesla’s main goal is to “accelerate the adoption of sustainable energy.” Musk:

“We are neither here nor there when it comes to cryptocurrencies.”

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Last updated on July 21, 2022

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