Bitcoin recovers after falling due to news that Tesla has sold 75% of its holdings

A representation of the virtual cryptocurrency Bitcoin is shown in this illustration taken on October 19, 2021. REUTERS/Edgar Sue/FILE PHOTO

Register now to get free unlimited access to Reuters.com

NEW YORK, July 20 (Reuters) – Bitcoin rebounded after a short sell-off late on Wednesday sparked by news of electric car maker Tesla. (TSLA.O) It has sold about 75% of its virtual token holdings.

Tesla CEO Elon Musk cited concerns about his company’s “total liquidity” as the reason for the sale.

The world’s largest cryptocurrency was up 1.04% at $23,494.57, after slipping 0.5% to $2,268.92 in the news.

Register now to get free unlimited access to Reuters.com

Tesla sold $936 million worth of bitcoin in the second quarter, more than a year after the company bought $1.5 billion of the cryptocurrency at the height of its massive growth and popularity.

Musk has been an outspoken supporter of cryptocurrency. His statements about the future of cryptocurrency and disclosures about his ownership of digital assets often boost the price of the Dogecoin and Bitcoin.

On Tesla’s earnings call, Musk said the main reason for the sale was uncertainty about shutdowns due to COVID-19 in China, which created production challenges for the company.

“It was important for us to maximize our cash position,” Musk said. “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as a judgment on bitcoin. It is just our concern about the company’s overall liquidity.”

Musk added that Tesla has not sold any of its dogecoin, the meme-based cryptocurrency that he promoted.

See also  Elon Musk tweeted that he confronted Bill Gates about short selling Tesla

Tesla accepted bitcoin as a payment for less than two months before stopping in May 2021. Musk said the company could resume accepting bitcoin once it conducts due diligence on the amount of renewable energy needed to mine the coin.

Bitcoin has been in recovery mode so far this week, in line with the stock market, as investors look more optimistic about the US Federal Reserve’s ability to rein in decades-high inflation.

Register now to get free unlimited access to Reuters.com

(Additional reporting by Hannah Lang, Gertrude Chavez-Dreyfus and Nevedita Ballou; Editing by Margarita Choi, Richard Boleyn and Richard Chang

Our criteria: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.