Tesla Inc. sold a significant chunk of its Bitcoin holding, an investment that helped legitimize the world’s largest electronic currency.

The carmaker had converted roughly 75 per cent of its Bitcoin to fiat currency as of the end of June, adding US$936 million of cash to its balance sheet, according to its shareholder letter on second-quarter earnings. Chief Executive Officer Elon Musk said on a call with analysts that the company sold due to uncertainty as to when Covid shutdowns would lift in China.

“This should not be taken as some verdict on Bitcoin,” Musk said. “It’s just that we were concerned about overall liquidity of the company given the Covid shutdowns in China.”

Musk, 51, emerged as a major influencer in cryptocurrency last year, tweeting favorably about Dogecoin and posting photos of his dog Floki, which like the Dogecoin mascot is a Shiba Inu. When Tesla held a massive party for its new Austin factory in April, a drone show featured a Dogecoin image.

During an appearance at a Bitcoin conference a year ago, Musk said the three things he personally owned aside from Tesla and Space Exploration Technologies Corp. were Bitcoin, Ether and Dogecoin. “I might pump, but I don’t dump,” he said.

Tesla first disclosed in February of last year that it had invested US$1.5 billion in Bitcoin, then announced it had sold 10 per cent of its stake two months later. Tesla said Wednesday its digital assets have shrunk to US$218 million and that a Bitcoin impairment dragged on profitability in the second quarter.

The cryptocurrency has retreated from a record high of almost US$69,000 in November. The largest cryptocurrency by market value traded down 1.1 per cent to around US$22,998 as of 11 a.m. in London.

Musk’s embrace of Bitcoin helped serve as a catalyst for the digital currency after Tesla briefly accepted the token for purchases. But the company later suspended the payment option, citing environmental concerns about its mining processes. The further pullback marks a hawkish move from one of the crypto sector’s most prominent bulls during what has been termed as a “crypto winter.”

Still, Musk continues to position himself as pro-crypto, hinting in recent weeks that SpaceX may join Tesla in accepting Dogecoin for merchandise purchases in future. The CEO said during the carmaker’s earnings call that it hasn’t sold any of its Dogecoin.

Shares in MicroStrategy Inc., another major corporate buyer of Bitcoin, traded down more than 4 per cent early trading Thursday. At the end of June, the software firm’s own Bitcoin pile was worth around US$3.4 billion less than the prior quarter.

Josh Olszewicz, head of research at crypto fund manager Valkyrie Investments, said rough estimates would place Tesla’s Bitcoin sales at around the US$30,000 price level, with US$218 million in remaining digital assets on its balance sheet.

“Strongly bearish market conditions since the beginning of the year as well as the need for cash on the balance sheet likely contributed to this decision,” Olszewicz said. “From a treasury management perspective, downside volatility may have been too unattractive to ignore in the near term.”