Tesla sells 75% of its Bitcoin holdings, but not any Dogecoin, Musk says

‘Cryptocurrency is a sideshow to a sideshow,’ Musk says

Almost a year after Tesla chief Elon Musk tweeted “diamond hands” emojis to signal that the company will be holding its cryptocurrency, the electric vehicle manufacturer revealed in its quarterly earnings report on Wednesday that it has sold 75 per cent of its Bitcoin holdings.

In February last year, the company had announced that it had invested $1.5bn in bitcoin.

“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla said in its second-quarter earnings statement on Wednesday.

Now, in the middle of what has been dubbed the “crypto winter”, the company reports it has sold most of its bitcoin holdings for $963m with the value of its remaining “digital assets” now at $218m.

“The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the Covid lockdowns in China would alleviate so it was important for us to maximise our cash position,” Mr Musk said in an earnings call on Wednesday.

“It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China. And we have not sold any of our dogecoin,” the multibillionaire said.

The Tesla chief urged that the move “should be not taken as some verdict on bitcoin,” adding that the company is open to increasing its crypto holdings in the future.

Tesla had said in a February filing with the US Securities and Exchange Commission (SEC) that it may increase or decrease its holdings of digital assets “at any time based on the needs of the business and on our view of market and environmental conditions.”

“We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash,” the company had said.

In the hours following the earnings call, bitcoin’s price has slightly dropped from $23,740 by about 2 per cent and is currently valued close to $23,270.

Bitcoin has been in recovery mode in the last week, in line with the stock market, with the world’s leading cryptocurrency surging by over 20 per cent in the period and reaching its highest level in more than a month.

Tesla also reported second-quarter earnings above Wall Street projections with sales rising 42 per cent to $16.9bn from $12bn a year ago, according to the EV company’s letter to its investors.

However, the electric car manufacturer seemed less enthusiastic on Wednesday about its cryptocurrency investments than it was a year ago when Mr Musk gave himself the title “Technoking of Tesla” and added the “Master of Coin” title to Chief Financial Officer Zachary Kirkhorn.

“Cryptocurrency is a sideshow to a sideshow. Cryptocurrency is not something we think about a lot,” Mr Musk said during the earnings call.

“The fundamental goal of Tesla and the reason we’re doing this, which is my primary motivation here, is to have the day of sustainable energy come sooner. That’s our goal. We’re neither here nor there on cryptocurrency,” he said.