Elon Musk is a crypto icon. This is largely due to its association with the– for a few months last year, Musk was known as “Dogefather” – but that’s also because Tesla is one of the largest institutional investors in bitcoin. Or at least it was.
In Tesla’s latest earnings report, released on Wednesday, the company revealed that it had sold the majority of its bitcoin: “We converted approximately 75% of our bitcoin purchases into fiat currency. Conversions in the second quarter added $936 million of cash to our balance sheet.”
In a subsequent earnings callMusk explained that the sale was linked to ongoing COVID lockdowns in China, the world’s largest auto market and also where many Tesla vehicles are made.
“The reason we sold a bunch of our bitcoin holdings is because we didn’t know when the covid shutdowns in China were going to ease, so it was important for us to maximize our cash position given the uncertainty,” Musk said. “We are certainly open to increasing our bitcoin holdings in the future, so this shouldn’t be seen as a bitcoin verdict.”
“We haven’t sold any of our dogecoin, we still have our dogecoin,” Musk added.
Tesla has $621 million in cash, according to Wednesday’s earnings report, meaning cash flow would have been negative without the sale of $936 million worth of bitcoins.
The purchase of $1.5 billion worth of bitcoins by Tesla,, contributed to market euphoria for the cryptocurrency that saw the price of bitcoin skyrocket from around $20,000 in December 2020 to $60,000 in March 2021. Tesla’s bitcoin reserves at one point peaked at $2 billion. Tesla originally bought bitcoin to “give us more flexibility to further diversify and maximize returns from our cash,” the company said in its 2021 SEC filing.
Boosted in large part by Musk’s encouraging tweets, dogecoinlast May and briefly reached a market capitalization of $70 billion. It’s unclear how much dogecoin Tesla owns, although the company’s earnings report says it holds $218 million in digital assets. Much of this will likely be Tesla’s remaining bitcoin.
Crypto prices have since fallen precipitously from their 2021 highs. Bitcoin is down 48% year-to-date, while Ether, the second-largest crypto,. Dogecoin currently sits just above 7 cents.
Although Musk is championed by the bitcoin and crypto communities, he has made statements praising and criticizing the technology. “Bitcoin is almost as bs as fiat currency. The key word is ‘almost,'” he said in February. “However, when fiat currency has negative real interest, only a fool would not look elsewhere.”
After announcing that Tesla would accept bitcoin as payment for its electric cars, Musk reversed his decision and said he would suspend such payments for environmental reasons, given the amount of fossil fuel energy needed to produce it. . “Cryptocurrency is a great idea on many levels and we believe it has a bright future, but it can’t come at a cost to the environment,” he tweeted.
Tesla did not respond to a request for additional comment.
Correction: This story first misrepresented the amount of money Tesla got for its sale of cryptocurrency. The company earned $936 million in cash from the transaction.