Why Did Elon Musk Sell Tesla's Bitcoin?
Back in February 2021, Elon Musk made headlines when he announced on Twitter (NYSE: TWTR) that his electric car company, Tesla (NASDAQ: TSLA), would buy Bitcoin (CRYPTO: BTC) as an alternative to cash. At the time, many viewed the purchase as one of the most significant events in Bitcoin's short history. The $1.5 billion purchase of Bitcoin caused a frenzy of buyers to pile in and drive the price of Bitcoin up nearly 20% in less than 24 hours.
Tesla and Musk are now back in the spotlight for the same Bitcoin bought over a year ago. In a quarterly earnings call, Musk disclosed that Tesla sold 75% of its Bitcoin holdings. He cited that the company faced a need for liquidity amid uncertainty in its Chinese operations due to extended COVID-19 lockdowns. With supply chain disruptions and labor shortages, the company needed cash on hand to ensure the disruption in production didn't have as large of an impact.
The announcement caused Bitcoin to dip slightly, but it regained those losses quickly after Musk further clarified his comments. He mentioned that the sale "should not be taken as some verdict on Bitcoin" and that the company would look to increase Bitcoin holdings in the future.
Source Fool.com
