Why Did Tesla Sell Bitcoin and What Could Be Next?

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You probably heard that Tesla  (TSLA) – Get Tesla Inc. Report sold 75% of its Bitcoin holdings, which added around $936 million to its balance sheet.

Tesla sold bitcoin at an average of $28,000, which is roughly a 9% discount from their average entry price of $31,000. The sale pushed Tesla to be cash flow positive instead of negative for this quarter, and according to Elon Musk, the company also decided it was worth selling most of its holdings at a loss due to China’s covid lockdowns.

Musk said on the earnings call that Tesla wasn’t sure when the lockdowns would lift, and therefore wanted to get ahead of them. Musk also clarified that the company has not sold its Dogecoin, and that it’s willing to increase the company’s bitcoin holdings in the future. But, he did also add that crypto has yet to contribute to an environmentally sustainable future.

FULL VIDEO TRANSCRIPT BELOW:

Unless you live under a rock, you probably heard that Tesla sold 75% of its Bitcoin holdings in Q2, which added over $900 million to its balance sheet.

They sold bitcoin at an average of $28,000, which is roughly a 9% discount from their average entry price of $31,000. The sale pushed TSLA to be cash flow positive instead of negative for this quarter, and according to Elon Musk, the company also decided it was worth selling most of its holdings at a loss due to China’s covid lockdowns. Musk said on the earnings call that Tesla wasn’t sure when the lockdowns would lift, and therefore wanted to get ahead of them.

But it kind of makes me think, in this same quarter, there were a few big name bankruptcies such as 3 Arrows Capital and Celsius…could Tesla selling the majority of their holdings have been a sign they saw trouble coming in the overall industry. I don’t know, but Musk did clarify that the company has not sold its Dogecoin, and that it’s willing to increase the company’s bitcoin holdings in the future. Should Tesla buy more Bitcoin here?

It’s your boy Ross Mac and that was the Crypto Minute on TheStreet.