Musk: "Inflation to Ease by Year-End... Bitcoin Sold Only Because Cash Was Needed"

Caution Against Overinterpreting Bitcoin Liquidation
"Did Not Sell Dogecoin" Explanation

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Hyun-jung] Elon Musk, CEO of Tesla, said that inflation may ease toward the end of this year. He explained that the liquidation of Bitcoin was necessary to secure liquidity in preparation for the prolonged COVID-19 lockdowns in China.

The Wall Street Journal (WSJ) reported on the 21st that Musk made these remarks during Tesla's earnings conference call. He emphasized, "Economic forecasts inherently contain errors," and cautioned against overinterpreting his outlook by asking to take it "as a grain of salt."

Musk and Tesla's management said that while prices of some commodities like aluminum and carbon steel are declining, prices of other commodities including lithium remain high. Musk stated, "I want to once again urge entrepreneurs to enter the lithium refining business," adding, "Mining is relatively easy, but the economy is tough."

He also explained that the company's Bitcoin liquidation in the second quarter was influenced by China's COVID-19 lockdowns. He said, "The reason for selling a large amount of Bitcoin was the uncertainty about when China's lockdown would ease, so it was important to maximize our cash position considering that." Previously, Tesla had announced that it sold 75% of its Bitcoin holdings.

Musk said, "We are also open to increasing our Bitcoin holdings in the future," and explained, "This (Bitcoin liquidation) should not be interpreted as any judgment on Bitcoin." He added, "We were simply concerned about the overall liquidity of the company closed in China, and we did not sell Dogecoin."