Tesla sells bitcoin reserves at $170 million loss

August 9, 2022

Bitcoin

Tesla chief Elon Musk is a shrewd businessman, but for advice on crypto-currencies, we wouldn’t be looking to him anytime soon. Led by Musk, Tesla bought $1.5 billion worth of bitcoin in February 2021, but the automaker has since sold 75% of its bitcoin reserves at a huge loss. The value of the world’s largest crypto currency fell some 50 percent this year. Documents from the US stock market regulator SEC show that Tesla wrote off $170 million (€166 million) on the digital currency in the first half of this year.

Liquidity

According to Musk, the future of cryptocurrency still looks bright. In an earnings call with Tesla investors, Musk explained the reason Tesla was so quick to sell its bitcoin reserves: “The reason we sold some of our bitcoin holdings was that we weren’t sure when the covid lockdowns in China would abate, so it was important for us to maximize our cash position. This should not be taken as a judgment on bitcoin. It’s just that we were concerned about the overall liquidity of the company”

Dogecoin

The fact that Musk still sees a future in crypto-currency is demonstrated by the fact that you can pay with crypto at Tesla and SpaceX. At both companies you can buy merchandise with Dogecoin – a beloved crypto currency of Musk – but previously you could also buy a Tesla with bitcoin.