Tesla has sold 75% of its Bitcoin holdings. Tesla sold Bitcoin at a time when the cryptocurrency was at a record low for the month and had dropped more than 50% since October of the previous year.
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Tesla, the Elon Musk-owned electric vehicle manufacturer, announced in a statement that it has sold a sizable portion of its Bitcoin assets. In its financial report for the second quarter, the business revealed that it had sold 75% of its Bitcoin holdings, a move that contributed to the rise of the world’s largest cryptocurrency by market cap.
According to a shareholder letter Tesla released on Wednesday as part of its quarterly results report, “As of the end of Q2, we have converted approximately 75 per cent of our Bitcoin purchases into fiat currency.” According to the statement, “Conversions in Q2 added $936M of cash to our balance sheet.”
According to Tesla’s balance statement, it has net digital assets worth $218 million, a decrease from the $1.26 billion reported in the previous quarter. Elon Musk’s business also said that the impairment of Bitcoin had an effect on its Q2 operational income and profitability compared to the same period last year. Additionally, Tesla reported that the sale of Bitcoin has increased its regular cash flow by $936 million. According to the company’s statement, cash flow from digital assets was $272 million in Q1 2021.
In the earnings call, Elon Musk stated that owing to the uncertainty surrounding the Covid shutdowns, Tesla sold its Bitcoin holdings in order to maximize its cash position. He argued that it would be incorrect to interpret Tesla’s cryptocurrency sale as “some verdict on Bitcoin.”
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Tesla sold Bitcoin at a time when the cryptocurrency was at a record low for the month and had dropped more than 50% since October of the previous year. Tesla had revealed in February 2021 that it had purchased $1.5 billion worth of Bitcoin. In April of that same year, it liquidated 10% of its stake, with the proceeds showing up in Q1 2021. Tesla, however, stopped making Bitcoin investments in February 2021. The digital asset for Tesla has decreased to $218 million, according to the company’s financial report.
Due in part to Elon Musk’s support of cryptocurrencies at the time, bitcoin values rose to all-time highs in 2021, reaching almost $69,000 in November, before suffering a severe knock amid choppy market circumstances and losing 50% of its value. Bitcoin’s price increase was significantly influenced by Tesla’s investment in the cryptocurrency. The price of one Bitcoin has been circling between $17,000 and $22,000 over the past few months.
Tesla made no mention of how many Bitcoins it had first purchased or how many it had sold as of late, but Elon Musk had previously hinted that the business might have purchased 42,000 Bitcoins. Even more recently, the business even began briefly accepting Bitcoin payments before ending it due to environmental concerns.
No Dogecoin Sold by Tesla
“We have not sold any of our Dogecoin,” Musk stated during the earnings call, clarifying why he liquidated his Bitcoin assets. Although Tesla has not commented on its Dogecoin assets to date, the business began taking DOGE payments for some items in January.