Musk’s social media posts inspired significant business activity.
Demand for the currency has also increased due to Tesla’s $1.5 billion investment in Bitcoin, which was made public in February 2021.
As a result, the price of the highly volatile cryptocurrency last year jumped to about $70,000 in November.
The company then disclosed that 10% of its stock had been sold in April.
Currently, the majority of the company’s cryptocurrency assets have been sold, As the maker of electric vehicles sold off 75% of its bitcoin, which was valued at $2 billion at the end of 2021.
Musk said at the time on social media that the company would not sell its bitcoin holdings.
According to BBC News, the company’s remaining “digital assets” are worth $218 million, while the value of the Bitcoin contract it sold off was roughly $963 million.
Tesla also mentioned that it purchased traditional currency from bitcoin sales totaling $936 million.
The reason behind Tesla selling its Bitcoin
First, Tesla stopped taking Bitcoin as payment for its vehicles in May of last year, citing worries about the environmental effect of energy-intensive Bitcoin mining.
Tesla will cease taking bitcoin for car purchases owing to the environmental effect of mining, but the company “will not sells any bitcoin,” according to Musk.
On the earnings call, Musk, when questioned about Bitcoin’s potential as an inflationary hedge, stated that Tesla’s main goal is to hasten the transition to sustainable energy.
Musk said that we liquidated part of our bitcoin assets since we didn’t know when the COVID lockdowns in China would be lifted.
Given the unpredictability of the COVID lockdowns in China, it was critical for us to optimize our financial position.
Even though China had relaxed COVID limitations in most major cities by the end of May, a surge in the number of positive coronavirus cases caused the authorities to reimpose stricter regulations a few weeks later.
In Shanghai, mass testing and lockdowns were performed early this month.
As a result, Tesla announced on Wednesday that its second-quarter profitability drop 32% from the previous quarter, owing to a series of price increases for its cars, which Elon Musk later described as “embarrassingly high” and potentially harmful to demand.
Tesla’s pricing has risen many times in the last year. For example, the US pricing of its long-range Model Y is currently $65,990, up more than 30% from the beginning of 2021.
As a result, Tesla sales decreased to 254,000 vehicles from April to June, their lowest quarterly level since last autumn.
Revenue fell to $16.93 billion from $18.76 billion in the prior quarter, bringing the company’s recent string of record revenue to a stop.
However, total earnings were higher than predicted, even though the electric vehicle producer was facing an uphill struggle with plants in Shanghai shutdown and supplies running low.
The electric car manufacturer announced adjusted profits per share of $2.27 for the second quarter ended June 30, compared to analyst projections of $1.81.
Musk stated that he expects inflation to begin to fall by the end of the year and commodity costs to stabilize, which he thinks would allow Tesla to reduce pricing modestly, stressing that Tesla is still targeting a 50% increase in deliveries this year.
Musk stated that new plants in Berlin and Texas will produce 5,000 cars per week by the end of the year, adding that Berlin produced 1,000 cars per week in June. according to Reuters.
Tesla is interested in purchasing more Bitcoin in the future
Tesla was unclear about how long the COVID lockout in China would persist, according to Musk, therefore the sale was undertaken to increase liquidity.
Additionally, Musk claimed that the corporation does not give bitcoin much attention and views it as an afterthought. According to Musk, Tesla’s main objective is to “accelerate the rise of renewable energy.”
Musk stated that Tesla is open to purchasing more Bitcoin in the future, despite the fact that the majority of the corporation’s Bitcoin holdings have already been converted to fiat currency.
He also added that the company will not sell any of its Dogecoin holdings.
He added that Tesla is open to boosting its cryptocurrency holdings in the future, saying “This should not be taken as a judgment on bitcoin.”