On Wednesday, Elon Musk’s Tesla sold off 75% of its Bitcoin holdings, which amounted to approximately $936 million. This step was taken to boost the cash holdings considering China’s uncertainty around covid lockdowns.
After this news, Bitcoin dropped sharply to 2.48% in the last 24 hours, according to CoinMarketCap. Even Ethereum dropped to 5.16%.
During a conference call, Elon Musk said, ” The reason we sold a bunch of our Bitcoin holdings was that we were uncertain when the covid lockdowns in China would alleviate. So it was important for us to maximize our cash position”.
However, Elon Musk pointed out that Tesla is willing to increase its Bitcoin holdings in future. He also mentioned that this move “should not be taken as some verdict on Bitcoin.”
History of Tesla and Bitcoin
February’21: Tesla invested $1.5 billion in Bitcoins. It was seen as a positive move, and Bitcoin saw a boost in its price to $43,000
May’21: Tesla announced that it would not accept payment in Bitcoin due to its usage of fossil fuels and the environmental impact of bitcoin mining
April’22: In its first quarter report, Tesla showed its faith and wrote that it believes in Bitcoin’s “long term potential of digital assets both as an investment and also as a liquid alternative to cash.”