As the crypto winter continues unabated, companies holding chunks of bitcoin appear to be in a race to sell them off. Apart from MicroStrategy that has kept buying the dip, others have sold off much of their crypto assets or are exploring how to save whatever is left.
The newest firm in the ‘selloff party’ is Tesla. The electric vehicle company had in February, purchased $1.5 billion worth of bitcoin with its balance sheet capital, boosting the crypto market value.
But as winter comes, CEO Elon Musk looks like he’s had enough.
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During its Q2 earnings report, Tesla disclosed it has sold 75% of its Bitcoin holdings this quarter for $963 million. The company said the value of its remaining “digital assets” is $218 million.
Musk became bitcoin’s cheerleader last year when he announced that Tesla will accept the coin for payment, sending the price up. But concern about bitcoin’s carbon footprint forced him to rescind his decision. Musk is pioneering the biggest electric vehicle company in the world with the aim to curtail the impact of vehicle carbon emission on the environment.
Based on this, Musk suddenly announced that Tesla will no longer accept crypto as a means of payment, sending the digital asset crashing. Tesla is holding both bitcoin and Dogecoin.
Now the company is selling its bitcoin as the crypto crash continues with no hope in sight for a market rebound. All crypto assets have come under the heavy weight of the market crisis, which has since last year, triggered a massive selloff.
However, it is hoped that Tesla would use bitcoin again in the future. The company’s executives said in an earnings call, that the reason for the sale was a desire to maximize cash positions during the uncertainty of China’s COVID lockdowns.
“We are certainly open to increasing bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin. It’s just that we were concerned about overall liquidity for the company given COVID shutdowns in China,” Tesla CFO Zachary Kirkhorn said.
Musk had earlier promised to go back to bitcoin as soon as there is a solution to its carbon emission concern. However, Tesla’s decision to sell its bitcoin may add nails to the digital asset’s coffin.