Tesla had to sell most of its bitcoin holdings to meet unexpected production costs in China, the USA, and Germany.
The electric vehicle giant Tesla sold $936 million of its bitcoin holdings in Q2 this year. However, the move was prompted not because the company does not believe in the asset anymore, but because of the record production costs in China due to the last COVID-19 lockdown, CEO Elon Musk explained.
Earlier this week, the renowned automobile manufacturer announced it had sold 75% of its bitcoin holdings during Q2, 2022.
Unsurprisingly, the disclosure affected the price of the primary cryptocurrency.
While it was close to solidifying its position at $24K, the news brought it down to under $23,000.
Speaking on the recent sell-off, Elon Musk – CEO of Tesla – clarified that the company’s production costs in China soared to unseen levels due to the latest COVID-19 lockdowns in the country.
The entrepreneur explained that selling nearly $1 billion worth of bitcoin helped the firm meet its unpredicted costs.
Musk further outlined that Tesla was in desperate need of fresh funds due to its newly opened factories in Germany and the USA. He previously called the facilities in Berlin and Austin, Texas, “gigantic money furnaces.”
While Tesla sold a significant chunk of its crypto stash, Elon Musk remains a HODLer.
Last summer, he admitted investing some of his wealth in Bitcoin, Ethereum, and Dogecoin. In March 2022, he assured that he won’t part with his possessions.