At the company’s second quarter of the year report, the electric car company revealed it has sold 75% of its Bitcoin holdings this quarter, for $963 million, noting that the value of its remaining “digital assets” is $218 million.
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Early last year, Tesla invested $1.5 billion in bitcoin, banking on what the electric car maker called the digital currency’s “long-term potential.” The company has already sold three-quarters of its holdings.
“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla said in its second-quarter earnings statement on Wednesday. The company said those sales added $936 million in cash to its balance sheet.
It’s a rapid retreat for Tesla and CEO Elon Musk, who was a heavy crypto booster during last year’s runup, frequently tweeting about various digital currencies. The price of bitcoin has lost half its value in the past four months during what’s been dubbed a “crypto winter.”
Also Read: Do You Know How Many Bitcoin Elon Musk Holds ? Tesla Latest Financial Report Revealed.
For Tesla, the fair market value of its bitcoin holdings reached $2.48 billion in the first quarter of 2021 and ended the year at about $2 billion. The company didn’t say at what price it sold or provide the size of its impairment, but bitcoin started the second quarter at close to $46,000 and ended below $19,000.
Analyst Brian Johnson at Barclays estimated earlier this week that Tesla would see a $460 million bitcoin-related impairment given the selloff.
“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,” Musk said in an earnings call on Wednesday. “This should be not taken as some verdict on bitcoin,” he said, adding that Tesla is open to increasing its crypto holdings in the future
