Beyond his fortune and his incendiary verbiage, Elon Musk is known for being one of the entrepreneurs who has evangelized the most about the use of Bitcoin. That led him to Teslathe electric car company he runs, also opted to invest in the most popular of the cryptocurrencies. However, the crisis in which virtual currencies live has led the tycoon to take a swerve and the car manufacturer has gotten rid of up to 75% of its crypto investment.
By the end of June, Tesla had converted roughly three-quarters of the Bitcoin it held into dollars, the value of which has plunged 47% so far this year. This maneuver has allowed the company to add 936 million cash to its balance sheet, thus curbing the losses it was suffering due to the devaluation of the cryptocurrency on which they had bet. This is detailed in the letter they have sent to Tesla shareholders about the earnings of the second quarter.
This movement illustrates the contradictions of Musk, who for months has publicly harangued his followers about the potential of cryptocurrencies and who, when they have fallen, has maneuvered to withdraw that bet to avoid suffering more losses without notifying his followers. “I might mine, but I don’t dump,” he said a year ago at a Bitcoin conference. ‘Holdear‘ or not to withdraw the money invested in an asset when it is falling is a repeated mantra by the crypto community. Those words have been carried away by the wind.
problems in china
Still, the tycoon denies that this divestment means his loss of confidence in Bitcoin. “This should not be taken as a verdict on Bitcoin,” he has excused himself. “It’s just that we were concerned about the overall liquidity of the company given the (auto plant) closures in China because of the covid”. Musk has also invested part of his fortune in cryptocurrencies Etherthe second most popular, and Dogecoinconsidered as a joke.
It was in February 2021, when Bitcoin was experiencing its first major revaluation peak, that Tesla announced that it had invested $1.5 billion in this cryptocurrency, a decision that also contributed to that peak. Two months later he announced that 10% of that stake had been sold. With today’s decision, the electric car manufacturer in the hands of Musk has reduced its digital assets to 218 million dollars.