The automaker, Tesla reported $2.26 billion in profit this quarter and is selling 75% of its Bitcoin (BTC) holdings, to improve cash flow during economic slowdowns.On Thursday, Tesla Share surged 1.86% to $758.00 in pre-market trading.
Crypto industry experts are largely unfazed by Tesla’s decision to sell 75% of its Bitcoin (BTC) holdings, saying it’s a fairly typical strategy for companies to improve cash flow during economic slowdowns.
The electric vehicle manufacturer revealed on Wednesday that it had sold 75% of its Bitcoin holdings in Q2, adding $936 million in fiat to its balance sheet.
Tesla CEO Elon Musk during a conference call, noted that the sale should not be taken as a verdict on Bitcoin, explaining that the move was due to liquidity concerns given the continued COVID-19 lockdowns in China.
“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 maximize our cash position:”
“We are certainly open to increasing our Bitcoin holdings in the future.”
It was asked by the investors during the earnings call to Elon Musk, whether he saw Bitcoin as a long-term asset, Musk said the cryptocurrency was a sideshow to the sideshow of Tesla’s main goal, which is to accelerate the advent of stable energy.
“Cryptocurrency is not something we think of a lot,” he said.
Markus Thielen, chief investment officer at Singapore-based digital asset manager IDEG, told Cointelegraph that Tesla likely sold off its Bitcoin as it was “seen as a distraction from their core business:”
“I would not be surprised if Tesla keeps nibbling in Bitcoin when Bitcoin stabilizes, otherwise they would have sold 100%.”
On Wednesday, Bitcoin’s price fell approximately 2.6% following Tesla’s announcement and has returned to $23,299 at the time of writing.
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