Tesla retracts Bitcoin shares post crypto havoc, sells majority stake

Tesla retracts Bitcoin shares post crypto havoc, sells majority stake

American automotive giant, Tesla Inc. has reportedly sold a massive portion of its stake in Bitcoin, a breakthrough investment that supported the legitimization of the largest electronic currency in the world.

As a part of the company’s earnings report, Tesla drafted a shareholder letter this week, stating that so far until the end of Q2, 2022, the automaker has converted approximately 75% of its Bitcoin investment into fiat currency.

According to the letter, the conversions done in the second quarter alone added $936 million of cash to Tesla’s balance sheet.

Last year in February, the automaker announced the investment of $1.5 billion in Bitcoin, and nearly two months later ended up selling 10% of its stake.

Followed by the disruptions in the crypto industry, Tesla realized a significant loss in its digital assets, which the company claims have dropped down to $218 million as a result of Bitcoin impairment that severely affected its second-quarter profitability.

Speaking on the latest move, Elon Musk, Chief Executive Officer of Tesla, emphasized on the Covid-driven shutdowns and explained that the company intends to maximize its cash position by selling Bitcoin.

Imperative to note that the cryptocurrency has fallen down from a record high of nearly $69,000 in November, while the largest cryptocurrency in terms of market value underperformed, showcasing a decline in sales ranging from $1.6% to $22,928.

Speculations have it that Tesla suspended the previously accepted token for purchases of Bitcoin, which significantly accelerated digital currency, on the grounds of environmental concerns associated with the mining processes.

The automaker’s decision to retract from Bitcoin is recognized by the crypto world as an aggressive move by one of the leading supporters of cryptocurrency.

Nonetheless, Elon Musk continues to portray himself as a pro-crypto with recent developments indicating that his spacecraft company SpaceX in addition to Tesla may start accepting Dogecoin for merchandise purchases in the future. 

Source Credit: https://economictimes.indiatimes.com/markets/cryptocurrency/tesla-sells-majority-of-bitcoin-after-turbulent-crypto-foray/articleshow/93016515.cms