Bitcoin Suffers Shortly After Tesla Sold Most of Its Assets | Business news

Bitcoin lost half a percent overnight after Tesla said it sold about 75% of its holdings of the virtual token.

The world’s largest cryptocurrency dropped to $23,268.92 (£19,489) after the news, though it later recovered, rising 1.41% last to $23,578.75.

Tesla bought $1.5 billion (£1.2 billion) of bitcoin more than a year ago, but on Wednesday it said it had sold $936 million (£783 million) during its second financial quarter.

Tesla CEO Elon Musk, a cryptocurrency financier, said the main reason for the sell-off was uncertainty over China, which has seen its economy hit by strict COVID lockdowns.

Mr Musk, the world’s richest man, said: “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as a judgment on bitcoin.

“It’s just that we were concerned about the company’s overall liquidity.”

Laura Hoy, analyst at Hargreaves Lansdown, said: “The bitcoin losses point to a key part of the Tesla investment case – the eccentric owner.

“While Musk’s impressive innovation has served the company well, his personal flair is starting to raise boardroom questions.”

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The news came as the electric car maker reported that its total second-quarter sales had fallen to $16.93 billion (£14.18 billion), from $18.76 billion (£15.71 billion) a quarter earlier. .

It said raising the price of its best-selling vehicles had helped to offset the challenges posed by China’s COVID lockdowns.

The price in the US of Tesla’s Model Y long-haul version has risen by more than 30% to $65,990 (£55,270) since the start of 2021.

Mr Musk said he expected inflation to ease by the end of the year — after previously saying he had a “super bad feeling about the economy” — and his company promised a “record-breaking second half.”

Tesla shares were up about 1% in after-hours trading, but fell about 40% from their November peak.