During today’s Tesla earnings call, Tesla CEO Elon Musk explained the company’s reason sale of 75% of its Bitcoin holdingsworth approximately $936 million, as reported in its second-quarter earnings report.
“The reason we sold some of our bitcoin holdings was because we didn’t know when the COVID lockdowns in China were going to ease,” Musk said on the call. “So it was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China.”
Although China eased COVID restrictions in major cities in late May, a spike in cases in Beijing and other key regions prompted the government to reimpose rules a few weeks later. Earlier this month, mass testing and lockdowns were put in place in Shanghai.
As a result, China’s “zero COVID policy” is again being tested, prompting further warnings of greater economic headwinds. Reuters reported that the world’s second-largest economy contracted sharply in the second quarter compared to the first, both in terms of industrial production and consumer spending.
During the call, the company explained that Telsa had converted most of its bitcoin holdings to fiat for a realized gain, resulting in a cost of $106 million for P&L (profit and loss) included in restructuring expenses. related to targeted staff reductions.
Despite the sale, Musk said Tesla was willing to increase its parts holdings in the future.
“This shouldn’t be taken as a verdict on Bitcoin,” he said, making sure to add that Tesla didn’t sell any of its Dogecoin.
In a follow-up Q&A session, Musk said cryptocurrency isn’t something the company thinks about much and is “a side show to the side show” and an afterthought for the company.
Musk clarified that Tesla’s main goal is “to accelerate the advent of sustainable energy.”
“We are neither here nor there on cryptocurrency,” he said.
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