Bitcoin recovers after falling on news Tesla sold 75 percent of its holdings
Bitcoin rebounded after a brief sell-off late on Wednesday
sparked by news that electric carmaker Tesla Inc had sold about 75 percent of
its holdings of the virtual token.
Tesla Chief Executive Elon Musk cited concerns about his
company's "overall liquidity" as the reason for the sale.
The world's largest cryptocurrency was last up 1.04 percent
at $23,494.57 after sliding as much as 0.5 percent to $23,268.92 on the news.
Tesla sold $936 million worth of Bitcoin in the second
quarter, more than a year after the company bought $1.5 billion of the
cryptocurrency at the peak of its massive growth and popularity.
Musk has been an outspoken supporter of cryptocurrencies.
His statements on the future of crypto and disclosures about his ownership of
digital assets often boost the price of dogecoin and Bitcoin.
On Tesla's earnings call, Musk said the primary reason for
the sale was uncertainty about lockdowns due to COVID-19 in China, which have
created production challenges for the company.
"It was important for us to maximize our cash
position," Musk said. "We are certainly open to increasing our
Bitcoin holdings in future, so this should not be taken as some verdict on
Bitcoin. It's just that we were concerned about overall liquidity for the
company."
Musk added that Tesla did not sell any of its Dogecoin, a
meme-based cryptocurrency that he has touted.
Tesla accepted Bitcoin as payment for less than two months
before stopping in May 2021. Musk has said the company could resume accepting
bitcoin once it conducts due diligence on the amount of renewable energy it
takes to mine the currency.
Bitcoin has been in recovery mode so far this week, in line
with the stock market, as investors appear more optimistic about the US Federal
Reserve's ability to rein in decades-high inflation. © Reuters