It’s amazing how a year can make a big difference. Tesla sold $936 million of Bitcoin worth in 2021 after making major investments in it in 2022. This was in order to reduce its Bitcoin holdings by 75%.
Tesla aggressively supported Bitcoin in 2021. They invested $1.5 billion in it as CEO Elon Musk praised Bitcoin’s benefits over fiat currency. Tesla customers could purchase cars with Bitcoin for a portion of the year.
However, Tesla’s profitability has been affected by Bitcoin impairment in the last few months, it stated in its financial summary for the second quarter.
Bitcoin reached delirious heights in 2021
Bitcoin saw record-breaking growth in 2021 thanks to the closely watched actions of Tesla. directly benefitted from Tesla’s crypto investments, which netted it more than $100,000,000 in profits.
Bitcoin, which is known for being volatile, was already on an upswing when Tesla announced its plans in February 2021. The cryptocurrency’s price quickly rose by tens or thousands of dollars.
Tesla stopped selling Bitcoin vehicles in May 2021 due to the negative environmental effects of using coal and other fossil fuels for mining the cryptocurrency. According to Coindesk, Bitcoin rose to $68,990.90 in autumn after a mid-summer slump.
Since last fall, markets have undergone a reorganization.
Since its inception, cryptocurrency has been a part of the attraction of digital currencies. Its independence from governments and promise of inflation and political independence were key factors.
However, a rising inflation and a deflated stock exchange have made Bitcoin more vulnerable to traditional market pressures. The U.S. central banks raises interest rates, and investors adjust their cryptocurrency holdings.
Tesla is one example of such investors, but one with huge resources and a CEO that can move markets with a tweet.
Before Tesla’s sale, a single Bitcoin was worth more than $24,000. Its value was well below $23,000 as of Thursday morning.