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During the company's Q2 earnings report, the electric car company revealed it has sold 75% of its Bitcoin holdings this quarter. The company sold the coins for $963 million.
Tesla said the value of its remaining "digital assets" is $218 million.
In February of last year, the company announced it had purchased $1.5 billion worth of the cryptocurrency with its balance sheet capital and furthermore that they would soon accept Bitcoin as payment for its vehicles. That announcement sent the crypto markets into a frenzy driving a number of cryptocurrency prices up and cementing Musk as a de facto crypto leader. Later, when he suddenly announced that they were abandoning plans to accept crypto payments, much of that goodwill with the community was reversed.
The company's selloff comes after a steep decline in the price of cryptocurrencies across the board, including both Bitcoin and Dogecoin, which Musk has personally supported in his social media postings and in his position as CEO of Tesla.
In an earnings call, the company's executives said the reason for the sale was a desire to maximize cash positions during the uncertainty of China's COVID lockdowns.
"We are certainly open to increasing 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 given COVID shutdowns in China," Tesla CFO Zachary Kirkhorn said.
The company's Q2 earnings report, which beat expectations with $2.26 billion in profit, didn't affect the stock price much at the time of writing in after-hours trading.
Rebecca Bellan contributed to reporting.