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Elon Musk’s Tesla sells off 75% of its Bitcoin holding in a big setback to cryptocurrency

Tesla CEO Elon Musk

Elon Musk-controlled Tesla has revealed that it sold off 75 percent of its Bitcoin holding, worth $936 million. The disclosure comes as a major setback for the cryptocurrency which had gained legitimacy because of the huge investment by Tesla and Musk’s support.

“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency," Tesla said in a shareholder letter on Wednesday as part of the company’s earnings report. “Conversions in Q2 added $936M of cash to our balance sheet."

The electric-car manufacturer disclosed in February 2021 that it had invested $1.5 billion in Bitcoin, and subsequently sold 10% of its stake that April. Tesla said on Wednesday that its digital assets have shrunk to $218 million, and that a Bitcoin impairment hurt second-quarter profitability.

However, Musk, one of the most eminent business personalities to promote cryptocurrencies and who keeps everyone guessing about his next move,  has also indicated he may buy bitcoin again in the future.

In his company's earnings call on July 20, Musk said Tesla selling bitcoin should not be considered as "some verdict" on the digital currency, Coindesk reported.

Musk cited concerns about his company's overall liquidity as the reason for the sale. He claimed that the company sold the Bitcoin to maximize its cash position because of uncertainty related to the Covid shutdowns