Musk explained in today's Tesla earnings call why the company sold 75% of its Bitcoin holdings, worth approximately $936 million, according to its earnings report for the second quarter.
As a result of uncertainty about the COVID lockdowns in China, we sold a lot of our bitcoin holdings, Musk said on the call. Because of the uncertainty of COVID lockdowns in China, it was important for us to maximize our cash position.'
The Chinese government eased COVID restrictions after the end of May, but a spike in cases in Beijing and other key regions led them to re-impose them a few weeks later. In Shanghai, mass testing and lockdowns were implemented earlier this month.
This has caused China's 'zero COVID policy' to be put to the test once again, resulting in a new warning of bigger economic headwinds.
The second-largest economy in the world's second quarter contracted sharply both in industrial production and consumer spending.
Telsa explained on the call that its Bitcoin holdings were converted to fiat for realized gains, netting a $106 million restructuring expense within staffing reductions related to restructurings.
While Tesla's coin holdings have fallen in recent months, Musk said the company is open to increasing them in the future.
'We shouldn't consider this a judgment on Bitcoin,' he added, making sure to stress that Tesla didn't sell its Dogecoins.
Musk responded to a follow-up question that cryptocurrency was not a big concern and 'a sideshow to the sideshow' and an afterthought for the company.
As Musk explained, Tesla's primary goal is 'accelerating the advent of sustainable energy.'
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