Tesla has sold 75% of its bitcoins, despite Elon Musk’s enthusiasm for crypto

Elon Musk is something of an icon within crypto. This is largely due to its association with the dogecoin meme, but it’s also because Tesla is one of the largest institutional investors in bitcoin. Or at least it was.

In Tesla’s latest earnings report, released on Wednesday, it was revealed that the company has sold the majority of its bitcoins. “We converted approximately 75% of our bitcoin purchases into fiat currency. Q2 conversations added $963 million of cash to our balance sheet.”

The purchase of $1.5 billion worth of bitcoins by Tesla, revealed in a filing with the SEC last February, contributed to the market euphoria for the crypto that sent the price of bitcoin skyrocketing from around $20,000 in December 2020 to $60,000 in March 2021. Tesla’s bitcoin reserves at one point hit a peak of $2 billion. Tesla originally purchased bitcoin to “provide us with more flexibility to further diversify and maximize our cash returns,” the company’s filing with the SEC announcing the purchase in 2021 says.

Crypto prices have since fallen precipitously from their 2021 highs. Bitcoin is down 48% year-to-date, while Ether, the second-largest crypto, dropped 57% since January 1. There is some debate over whether Tesla’s bitcoin sale was done out of necessity to maintain cash flow, or if it reflects shaken confidence in bitcoin and crypto in general. Tesla has $621 million in cash, according to Tuesday’s earnings report, meaning cash flow would have been negative without the sale of $936 million worth of bitcoins.

Although Musk is championed by the bitcoin and crypto communities, he has made statements praising and criticizing the technology in the past. “Bitcoin is almost as bs as fiat currency. The key word is ‘almost,'” he said in February. “However, when fiat currency has negative real interest, only a fool would not look elsewhere.”

After announcing that Tesla would accept bitcoin as payment for its electric cars, Musk reversed his decision and said he would suspend such payments for environmental reasons. “Cryptocurrency is a great idea on many levels and we believe it has a bright future, but it can’t come at a cost to the environment,” he tweeted.

Tesla was contacted for comment but did not immediately respond.