Elon Musk’s Tesla Sells Off About 75% of its Bitcoin Holdings
Elon Musk-owned electric car company Tesla has revealed in a statement recently that it has sold off about 75% of its Bitcoin assets during the second half of the year. $936 million in cash was raised from the sale of the world’s most popular crypto.
However, this comes with a significant loss. $1.5 billion worth of Bitcoin was originally bought by the electric car company back in the first half of 2021 when Bitcoin was trading at a price of around $31,000.
In a shareholder letter issued by the company on Wednesday, it stated;
“As of the end of Q2, we have converted approximately 75 PERCENT of our Bitcoin purchases into fiat currency,” Conversions in Q2 added $936M of cash to our balance sheet.”
Tesla now holds Bitcoin worth $218 million in its coffers which is down from more than $1.26 billion in the previous quarter. While the actual sales price was not made known, it is clear that the Bitcoin impairment had negatively affected profit.
Elon Musk revealed in an open earning call that his company sold most of its Bitcoin holding because of “liquidity concerns” which was brought about by China’s COVID lockdowns.
He also stated that the company certainly is open to buying more Bitcoin in the future to add to its holding. Also disclosing that it has not reduced its Dogecoin holdings. “We have not sold any of our Dogecoin,” he revealed during the call.
In 2021, the company showed in a statement that it had a cash flow of $272 million from digital assets. It started in January 2021 when the CEO announced his support for Bitcoin by adding the name of the cryptocurrency to his personal Twitter profile before moving to purchase $1.5 billion worth of Bitcoin a few days later and also started accepting Bitcoin payments in Tesla.
Remember that the price of Bitcoin skyrocketed to its all-time high of $69,000 in the last quarter of 2021 which was partly influenced by Elon Musk’s campaigning for cryptocurrency at the time.
While the actual date when the Bitcoin assets were sold is unknown, it is known that they were bought at an average price of $31,700 in the first half of 2021 and Bitcoin has suffered a massive drop since that time which suggests that the company must have experienced a significant loss.