The Tesla BTC sale for $936 million sent shockwaves across the crypto space late Wednesday, July 20, 2022, after the company revealed that it had reduced its BTC position by 75% in Q2. 

“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. The conversions in Q2 added $936M of cash to our balance sheet,” Tesla explained in its quarterly report

According to the financial statement, Tesla’s initial digital asset holdings stood at $1.261 billion after the Electric Vehicle maker sold 10% of its BTC holding in March 2021. Following the July 2022 liquidation, Tesla’s digital asset holdings now stand at just $128 million. 

Moreover, the report shows that Tesla’s net BTC holding was stable for the last three quarters, raising the question of why Tesla sold its BTC holdings. 

Why did Tesla offload its Bitcoin holdings?

Tesla began its crypto initiative in the first quarter of 2021 with plans to become more flexible and diversify its assets through BTC investments. The EV Company also planned to hold long-term and accumulate BTC to facilitate customer transactions. However, as seen on July 20, 2022, this was not to last. 

During a recent conference call, Tesla CEO Elon Musk noted that the company’s decision to liquidate its BTC holdings should not be taken as a verdict on Bitcoin. 

He stated, “The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the Covid lockdowns in China would alleviate, so it was important for us to maximize our cash position.” 

Nonetheless, Musk also stated that Tesla is still open to the idea of increasing its crypto holdings, although crypto assets might not contribute to their primary goal – sustainable energy.

What does the Tesla BTC sale mean for bitcoin – what the experts are saying?

Changpen Zhao comments on the Tesla BTC

Image credit to Bloomberg article

Although Tesla’s $936 million BTC sale delivered a blow to crypto investors, not all executives are worried. 

Justin Sun – Tron founder

According to the founder of Tron, Justin Sun, the sell-off is good news for the crypto market since investors do not have to worry about Tesla dumping BTC into the market — which has been a primary concern for many investors. 

Now that the BTC is in the hands of more reliable market makers, the crypto markets can expect stable market prices. 

Sun further indicated that Tesla’s sale of close to $1 billion was a clear indication of crypto liquidity to major corporations. 

Moreover, Tesla’s transparency with its balance sheet and digital asset holdings could encourage more big corporations to purchase crypto assets.

Changpen Zhao – Binance CEO

For Changpen Zhao, the CEO of Binance, with at least $100 billion BTC daily trading volume, someone selling $ 1 billion of BTC is a drop in the ocean.   

Markus Thielen – Chief Investment Officer at IDEG

According to Cointelegraph, Markus Thielen, chief investment officer of IDEG – a Singapore-based digital asset management firm, Tesla’s move was likely intended to reduce distraction caused by the crypto bear market and allow the EV Company to focus on their core business goals. 

“I would not be surprised if Tesla keeps nibbling on Bitcoin when Bitcoin stabilizes. Otherwise, they would have sold 100%,” Thielen added.

Kylie Purcell – Finder’s trading expert

Finder’s share trading expert Kylie Purcell also weighed in her opinion, explaining that the EV Company was not the only corporation that made this decision. 

“With the world heading into an economic slowdown and possibly a recession, it’s not unusual for investors and companies to move capital away from more volatile assets into fiat currency,” she added.

She also added that while BTC prices dipped, there were already signs of recovery and BTC prices might see higher prices. 

bitcoin Price after tesla sale

At the time of writing, BTC was trading at $22,917, down 3.76% in the last 24 hours.