Beyond the wealth and provocative rhetoric, Elon Musk is widely recognized as one of the entrepreneurs who has delivered some of the most upbeat forecasts about Bitcoin. Tesla, the electric car maker he leads, has also shown a willingness to invest in the world’s most prominent cryptocurrency. Yet, amid the volatility of digital assets, Musk moved to reduce exposure, and the automaker slashed as much as three-quarters of its Bitcoin holdings.
By the end of June, Tesla had converted roughly three-quarters of its Bitcoin into cash, a move that came as the cryptocurrency’s value had dropped about 47 percent over the year. The maneuver added about $936 million in cash to Tesla’s balance sheet and helped limit further losses tied to the devaluation of the digital asset. These details appear in Tesla’s shareholder letter accompanying its second-quarter earnings report.
The decision highlights a tension around Musk, who has spent months publicly talking up the potential of cryptocurrencies while simultaneously pulling back on investments to protect the company’s liquidity. He has suggested a mindset about holding assets when values fall, while also making strategic shifts to minimize risk. The crypto community often debates when to hold versus sell, especially during extended downturns. The dialogue around Musk’s moves circulated widely among investors and enthusiasts.
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Despite these moves, Musk has insisted that the divestiture does not signal a loss of faith in Bitcoin. He apologized for any misinterpretation and emphasized that the decision was driven by concerns about the company’s overall liquidity, particularly in relation to U.S. manufacturing operations. It is noted that Musk has also diversified some of his wealth into other cryptocurrencies, including Ethereum and Dogecoin, the latter sometimes viewed with skepticism by traditional investors.
Back in February 2021, when Bitcoin reached a major valuation peak, Tesla announced a $1.5 billion investment in the cryptocurrency, a move that contributed to the surge. A couple of months later, the company disclosed that a portion of that stake had been sold. Since then, the company’s digital assets have decreased to around $218 million as a result of ongoing market movements and related strategic decisions.