Tesla (TSLA) has sold 75% of its bitcoin (USD-BTC) holdings, adding $936m (£783.6m) in cash to its balance sheet, and causing the cryptocurrency market to slide backwards as it tries to escape the "crypto-winter".
News of the move damaged bitcoin's recent break-out and revealed how sensitive the cryptocurrency market is to the actions of the world's richest person, Tesla CEO Elon Musk.
Bitcoin dropped 3.1% in 24 hours, to $23,000 and ethereum (USD-ETH) fell 4.5%, to hover around the $1,500 mark.
The electric car maker's earnings report, released on Wednesday, revealed that it sold the majority of its bitcoin holdings during the second quarter of 2022.
Tesla's bitcoin holding was worth about $2bn at the end of 2021, but the price of the volatile digital asset has fallen by more than 50% this year.
Read more: Crypto live prices
Tesla CEO Elon Musk said the move was to maximise the company's cash position.
During the earnings call Musk explained the reason, stating: "We sold a bunch of our bitcoin holdings because we were uncertain when the COVID lockdowns in China would alleviate.
"So it was important for us to maximise our cash position, given the uncertainty of COVID lockdowns in China."
This was in reference to the recent mass testing and lockdowns implemented in major Chinese cities.
Despite the sell-off, the Tesla boss confirmed the electric carmaker has not sold any of its dogecoin (DOGE-USD) holdings.
Musk also confirmed that Tesla is open to increasing its bitcoin holdings in the future.
He said: "This should not be taken as some verdict on bitcoin," he said, making sure to add that Tesla has not sold any of its dogecoin.
Musk then claimed that cryptocurrencies were not something the company was primarily interested in.
He stressed that Tesla’s main goal is “to accelerate the advent of sustainable energy.”
He added: "We're neither here nor there on cryptocurrency."
In 2021, Tesla made a $1.5bn investment in the world's largest cryptocurrency. This was followed by an announcement it would accept bitcoin as payment.
The February 2021 revelation of the electric car maker's bitcoin holdings caused a surge of demand for the cryptocurrency.
However, in May of 2021, the electric car maker abruptly reversed its position on bitcoin payments causing the price of bitcoin to plummet.
Musk released a tweet in mid-May citing the environmental damage from bitcoin mining as the reason for the halt in accepting payments in the cryptocurrency.