Elon Musk’s Tesla sheds 75 per cent of its Bitcoin holdings as profits drop 

Tesla has sold 75 per cent of its Bitcoin portfolio as profits slid in the second quarter of the year. 

The electric automaker announced in its Q2 earnings report that it converted the Bitcoin to $936m (£782m) of cash, with its digital asset holdings now at $218m (£182.4m).

Profits fell to $2.3bn (£1.9bn) from a record $3.3bn (£2.8bn) profit in the first quarter, as the EV giant faced production challenges and the closure of its Shanghai factory. Tesla still reported a record month of vehicle production.

Tesla announced it had bought $1.5bn of Bitcoin on 8 February 2021, when its price was over $46,000 (£38,488), more than double its current price of below $23,000 (£19,244) and interest in the crypto market was booming during the pandemic. 

Bitcoin fell after Tesla announced the Bitcoin sale, and is trading 3.26 per cent lower to trade at $22,980 (£19,229) today. The crypto market has experienced a sharp crash this year that has led to the price of Bitcoin dropping about 50 per cent so far this year to trade at.

Tesla CEO Elon Musk has been a highly prominent advocate of cryptocurrency like Bitcoin and Dogecoin, the latter which Tesla said it still has not sold. His endorsements have helped increase interest in crypto and also caused sharp changes in the prices.

In May last year, Tesla stopped accepting Bitcoin for vehicle purchases but said it would not be selling any of its Bitcoin holdings.

The earnings come after Musk said he had a “super bad feeling” about the economy last and warned of a recession. The world’s richest man said Tesla would be laying off 10 per cent of staff, joining a growing list of companies cutting jobs or slowing hiring as the gloomy economic outlook dampens confidence.

Tesla did not immediately respond to a request for comment from Morning Wire