Tesla Dumps 75% of Bitcoin Holdings a Year After Praising Its ‘Long-Term Potential’

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Last year, Tesla invested $1.5 billion in Bitcoin, stating that the digital currency had “long-term potential.” Since then, the company has sold three-quarters of its holdings despite this rosy outlook on Bitcoin’s future.

CNBC reports that last year Tesla invested $1.5 billion in Bitcoin, stating that the cryptocurrency had “long-term potential” and expecting the digital currency to appreciate in value. Since then, Tesla has sold three-quarters of its holdings.

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Elon Musk watches SpaceX launch (Joe Raedle /Getty)

In its second-quarter earnings statement on Wednesday, Tesla stated: “As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency.” Tesla noted that those sales added $936 million in cash to its balance sheet.

Tesla and the company’s CEO Elon Musk have been heavily involved in promoting cryptocurrency in recent years. Musk himself frequently tweeted about cryptocurrencies such as Dogecoin causing a spike in value. But, in the past four months, Bitcoin has lost half its value in what is being referred to as a “crypto winter.”

In the first quarter of 2021, the fair market value of Tesla’s Bitcoin holdings reached $2.48 billion and ended the year worth around $2 billion. The company did not disclose at what price it sold or provide the size of its impairment, but Bitcoin began the second quarter at close to $46,000 and ended below $19,000.

Barclays analyst Brian Johnson estimated earlier this week that Tesla would see a $460 million Bitcoin-related impairment as a result of the selloff.

Tesla CEO Elon Musk said in an earnings call on Wednesday: “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. This should be not taken as some verdict on bitcoin.” Musk added that Tesla is open to increasing its crypto holdings in the future.

Elon Musk puzzled the Bitcoin world in 2021 with multiple U-turns on Tesla’s attitude towards the cryptocurrency. The company’s treatment of crypto seems to be more evidence that Elon Musk is the “bullshit artist” Donald Trump portrayed him to be.

Read more at CNBC here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan

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