Tesla sold its BTC stash because of the strict COVID lockdowns in China in order to maximize the company’s cash position so let’s have a closer look at our latest Bitcoin news.
In the latest earnings call, Musk said that the move was to maximize Tesla’s cash position and explained that Tesla sold its BTC stash right after China imposed its strict covid policies and the stash was worth about $936 million. Musk said in the earnings call:
“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, given the uncertainty of COVID lockdowns in China.”
China erased COVID restrictions in major cities in May after a jump in cases in Bejing and other regions prompted the governmetn to impose new rules a few weeks later. Earlier this month, the testing and lockdowns were yet again implemented in Shanghai. As a result, China’s zero Covid policy started out of its testing phase and prompted new warnings of a bigger economic headwind. Reuters reported that the second biggest economy in the world contracted sharply during the second quarter from the first in both consumer spending and industrial production.
On the call, the company explained that Tesla converted most of its BTC holdings for fiat and netted $106 million costs to the profit and loss included in the restructuring expenses related to the staffing reductions. Musk also said that Tesla is open to increasing the coin holdings in the future:
“This should not be taken as some verdict on Bitcoin.”
In a follow-up question, Musk said that cryptocurrency was not something that the company often thinks about and It is a sideshow to the sideshow in an afterthought for the company. Musk did clarify that TEsla’s main goal is to speed up the advent of sustainable energy:
“We’re neither here nor there on cryptocurrency.”
As earlier reported, The Boring Company opened a transit station in Las Vegas and will support dogecoin as a new payment method for using the Vegas Loop system. Elon Musk said he will be supporting DOGE wherever possible but he didn’t confirm the new use case for DOGE as the tenth biggest crypto by market cap.
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