Bitcoin suffers shortly after Tesla sells majority of its holdings | business news

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

The world’s largest cryptocurrency slipped to $23,268.92 (£19,489) after the news but later recovered to most recently climb 1.41% to $23,578.75.

Tesla bought $1.5 billion (£1.2 billion) worth of bitcoin more than a year ago, but announced on Wednesday that it had sold $936 million (£783 million) in the second fiscal quarter.

Tesla CEO Elon Musk, a cryptocurrency advocate, said the main reason for the sell-off was uncertainty over China, whose economy has been hit by strict COVID lockdowns.

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

“We were just concerned about the overall liquidity of the company.”

Laura Hoy, analyst at Hargreaves Lansdown, said: “The Bitcoin losses point to an important part of the Tesla investment – ​​its eccentric owner.

“While Musk’s impressive innovation has served the company well, his personal flair is beginning to raise questions about corporate governance.”

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The news came as the electric carmaker reported that its total second-quarter sales increased from $18.76 billion ($15.71 billion)

Increasing the price of its best-selling vehicles helped offset the challenges posed by China’s COVID lockdowns.

The US price of Tesla’s long-haul Model Y is up more than 30% since early 2021 to $65,990 (£55,270).

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

Tesla shares are up about 1% in after-hours trading but are down about 40% from their November peak.