Elon Musk-owned electric vehicle making company Tesla has sold a significant amount of its Bitcoin holdings, the firm said in a statement. Reporting its earnings for Q2, the company said that it had sold 75 per cent of its Bitcoin holdings, an investment that helped the world’s now-largest cryptocurrency by market cap, to achieve that position and surge rapidly in terms of value.
“As of the end of Q2, we have converted approximately 75 per cent of our Bitcoin purchases into fiat currency,” said Tesla in a shareholder letter on Wednesday, as part of its company earnings report. “Conversions in Q2 added $936M of cash to our balance sheet,” it said.
Tesla in its balance sheet has reported that it owns net digital assets worth $218 million, which is down from the $1.26 billion in the previous quarter. Elon Musk’s company further added that its Q2 year-on-year operating income and profitability were impacted by the impairment of Bitcoin. Tesla also said that it had added $936 million to its traditional cash flow from the sale of Bitcoin. In Q1 2021, the statement from the company had shown cash flow from digital assets worth $272 million.
Elon Musk in the earnings call said that Tesla sold its Bitcoin possession to maximise its cash position owing to the uncertainty related to the Covid shutdowns. He said that Tesla’s crypto sale should not be considered as “some verdict on Bitcoin.”
Tesla’s sale of Bitcoin comes at a time when the cryptocurrency has plunged to its months-low, going down by over 50 per cent since October last year. Tesla had in February 2021 disclosed that it had bought $1.5 billion worth Bitcoin, and subsequently sold 10 per cent of its stake that April, the result of which was reflected in Q1 2021. However, after February 2021, Tesla has not made any investments in Bitcoin anymore. Tesla’s digital asset has how shrunk to $218 million, the company’s earnings report shows.
Bitcoin prices soared to their all-time highs in 2021 to almost $69,000 in November, partly influenced by Elon Musk championing cryptocurrencies at the time, before taking a huge hit amid volatile market conditions and shedding its value by 50 per cent. The Tesla investment in Bitcoin had a significant role in the crypto coin’s price going up so rapidly. One Bitcoin is hovering around $17,000 to $22,000 for the past few months now.
Tesla did not specify how many Bitcoins it had initially bought or how many has it sold now, but Elon Musk last year had hinted that the company may have invested in 42,000 Bitcoins. The company even started accepting payments in Bitcoin for a brief period, before discontinuing it, citing environmental concerns.
No Dogecoin Sold by Tesla
“We have not sold any of our Dogecoin,” Musk said in the earnings conference call while explaining why he sold his Bitcoin holdings. While Tesla has not till date mentioned anything about its Dogecoin holdings, the company began accepting DOGE payments for some merchandise in January.