Electric car maker Tesla (TSLA) sold $936 million worth of bitcoin during the second quarter, the company said on Jul 20, due to uncertainties related to COVID-19 shutdowns in China. Tesla's remaining digital asset holdings total $218 million, marking a steep decline from its previous stash of $1.2 billion, which had remained the same over the previous three quarters.

"As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet," the company said in its earnings release, as quoted on Yahoo Finance.

Prior to this move, Tesla company hadn't bought or sold any of its bitcoin holdings since the first quarter of 2021, when it purchased $1.5 billion in bitcoin. The company later sold off 10% of these holdings, which it sold for $272 million in cash.

Tesla CEO Elon Musk said, "it should be mentioned that the reason we sold a bunch of our Bitcoin holdings was that we were uncertain as to when the COVID lockdowns in China would alleviate. So it was important for us to maximize our cash position, given the uncertainty of the COVID lockdowns in China,” as quoted on Yahoo Finance.

"We are certainly open to increasing our Bitcoin holdings in future," Elon Musk said, "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. And we have not sold any of our Dogecoin," as quoted on a Yahoo Finance article.        

Bitcoin has gone into a tailspin this year along with the broader market crash. The price of this cryptocurrency has nosedived about 57% this year. Notably, bitcoin hit an all-time high of $67.5K in November 2021.

After Tesla’s move, bitcoin may see some plunges. Below we highlight a few ETFs that may come under pressure in the coming days.

ETFs in Focus

Innovators ETF (BITQ Quick QuoteBITQ - Free Report)

The underlying Bitwise Crypto Innovators 30 Index measures the performance of companies involved in servicing the cryptocurrency markets, including crypto mining firms, crypto mining equipment suppliers, crypto financial services companies, or other financial institutions servicing primarily crypto-related clientele. It charges 85 bps in fees.

VanEck Digital Transformation ETF (DAPP Quick QuoteDAPP - Free Report)

The underlying MVIS Global Digital Assets Equity Index is a rule based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment. It charges 50 bps in fees.

Defiance Digital Revolution ETF

The underlying BITA NFT and Blockchain Select Index is rules-based and consists of the common stock of companies that earn a majority of their revenue from activities in the blockchain and cryptocurrency ecosystems or with exposure to the NFT ecosystem. It charges 65 bps in fees.

iShares Blockchain And Tech ETF (IBLC Quick QuoteIBLC - Free Report)

The underlying NYSE FactSet Global Blockchain Technologies Index composes of U.S. and non-U.S. companies that are involved in the development, innovation, and utilization of blockchain and crypto technologies. The fund charges 47 bps in fees.