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Tesla Sold the Majority of its Bitcoin. What Does it Mean for Crypto?

Tesla CEO, Elon Musk, has increased his popularity because of his support of cryptocurrencies. Namely, Bitcoin and Dogecoin.

In July of this year, Tesla sold off a large quantity of their Bitcoin reserves after stating in 2021 that Tesla had no plans to sell. So why the change? Is Tesla turned off of crypto? And why didn’t Tesla sell off all of their Bitcoin? Find the answers below.

Don't expect to buy a Tesla with BTC any time soon.

Tesla’s History with Bitcoin

Tesla announced in February of 2021 that the electric car manufacturer had quietly accumulated $1.5 billion worth of bitcoin. This prompted a swell in demand for bitcoin in 2021, spiking the price. Elon personally acquired some Bitcoin and Dogecoin and took to social media to let the public know about his acquisitions. This caused a Doge frenzy, taking the memecoin to almost $1 per DOGE.

In July of this year Tesla announced that they had sold off 75% of its Bitcoin in the midst of a declining market. Tesla stated that the company had traded their Bitcoin for traditional currency, given the declining value of the cryptocurrency. Tesla CEO, Elon Musk, has been a long time supporter of Bitcoin but it’s clear to see that the company’s finances still come first. Musk had also reported last year that despite holding reserves of Bitcoin, Tesla would not accept payment for Tesla vehicles in the form of bitcoin citing environmental concerns.

The selloff comes after Musk made endorsements about the currency. Musk stated last year that the company would not be selling its Bitcoin, but they have done just that. Musk’s words have the ability to shift markets, being among the world’s wealthiest people. However, perhaps Tesla’s Bitcoin selloff will prove to be a reminder that his promises are not always guaranteed, especially if they come from his twitter account.

Making Waves

As stated previously, Musk’s support for cryptocurrencies like Bitcoin and Dogecoin have had influence on their respective markets in the past. However, Tesla’s selloff of Bitcoin doesn’t appear to have had a great effect on the price of Bitcoin, which was already falling earlier this year. Part of the reason why this did not have a great effect on price was because Tesla sold off their Bitcoin prior to making the announcement. It had an impact on market sentiment, but a $1.5 billion dollar Bitcoin selloff is not coming on the horizon.

Given Musk’s support for cryptocurrency in the past, the company is not totally turned off of Bitcoin forever. The company has remarked that they are open to acquiring more Bitcoin in the future. But being a publicly traded company, shareholder value has to be prioritized at the company and they cited Bitcoin as being a loss for the company’s earnings.

While Musk and Tesla have had an influence on cryptocurrency markets in the past, this selloff doesn’t appear to be the sole cause of a drop in price of Bitcoin. The entire cryptocurrency market is in turbulence due to a number of other factors other than Tesla’s selloff. These factors include but are not limited to inflation, a decline in all markets worldwide, and a number of cryptocurrency platforms, companies, and DAOs facing insolvency and regulatory pressure.

Liquidity Worries

Musk stated in a conference call  that the move “should not be taken as a verdict on Bitcoin”. In the same call, Musk elaborated that the reason for the Bitcoin selloff was due to liquidity worries the company was facing given the COVID lockdown status in China, where Tesla has a plant in Shanghai. Tesla was aware of the loss they were taking by holding Bitcoin in the middle of a market decline and they could not guarantee that their production facilities in Shanghai would offset the losses. So, fearing more lockdowns in China Tesla sold off most of its Bitcoin holdings.

Musk also remarked in the conference call that Bitcoin is a “sideshow to the sideshow”. His main concern at Tesla is to “accelerate the advent of stable energy”, which Bitcoin and cryptocurrency was seen as a distraction from this goal. With that being said, it’s likely that Musk may keep his options open to buying more Bitcoin in the future, as they still kept 25% of their holdings in reserve. Tesla may continue to accumulate Bitcoin little by little in the future, but perhaps not in the billions of dollars in quantity.


Tesla is not alone in making these kinds of selloffs. With markets declining worldwide and with talks of a recession on the horizon, risky tech stocks and volatile cryptocurrencies look less appealing in the face of a potentially five quarter long recession, according to the Bank of England.

Tesla’s purchase of Bitcoin reserves in 2021 may not have lived up to some expectations from hodlers with diamond hands, but it added legitimacy to the idea of a company purchasing reputable cryptocurrencies. Musk’s selloff of the currency was mainly a cash move for liquidity in the face of lockdowns in Shanghai due to the covid pandemic. Bitcoin may be down, but it is certainly not out.

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Michael Brown

About the Author

Michael Brown

Michael Brown is the acting Chairman of community based thought collective, Subcultural Research Lab. His interest in Crypto began while studying industrial engineering in Dartmouth, Nova Scotia. His passion lies in geopolitics, social phenomenon, and the exchange of data. You can find Subcultural Research Lab at

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