Beyond his wealth and incendiary verbiage, Elon Musk is known to be one of the most evangelized businessmen in the past year on the use of Bitcoin. This led him to You’re herethe electric car company he runs, has also chosen to invest in the most popular of cryptocurrencies. However, the crisis in which virtual currencies live led the tycoon to swerve and the automaker lost up to 75% of its crypto investment.
By late June, Tesla had converted about three-quarters of the bitcoin it held into dollars, the value of which has fallen 47% so far this year. This maneuver allowed the company to add 936 million cash to its balance sheet, thus limiting the losses he suffered because of the devaluation of the cryptocurrency they had bet on. This is detailed in the letter they sent to Tesla shareholders regarding second quarter earnings.
This move illustrates the contradictions of Musk, who for months publicly harangues his followers on the potential of cryptocurrencies and who, when they fell, maneuvered to withdraw this bet to avoid suffering more losses without warning his followers. . “I could mine, but I don’t void,” he said a year ago at a Bitcoin conference. ‘Holdear‘ or not to withdraw money invested in an asset when it is down is a mantra repeated by the crypto community. These words were carried away by the wind.
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Yet the tycoon denies that this divestment signifies his loss of faith in Bitcoin. “This should not be taken as a verdict on Bitcoin,” he apologized. “It’s just that we were concerned about the overall liquidity of the business given the closures (of auto plants) in China because of the covid”. Musk has also invested part of his fortune in cryptocurrencies Etherthe second most popular, and Dogecoin, considered a joke. In recent weeks, the businessman has hinted that the rocket maker SpaceXwhich he also leads, could join Tesla and accept the purchase of its products with Dogecoin.
It was in February 2021, when Bitcoin was experiencing its first major revaluation spike, that Tesla announced that it had invested $1.5 billion in this cryptocurrency, a decision that also contributed to this spike. Two months later, he announced that 10% of that stake had been sold. With today’s ruling, the Musk-owned electric car maker has reduced its digital assets to around $218 million.