Tesla has sold 75% of its bitcoin holdings a year after praising it
Tesla made a $1.5 billion investment in bitcoin at the beginning of the year, relying on what it called the digital currency’s “long-term potential.” Three-quarters of the company’s stock has already been sold.
According to Tesla’s second-quarter earnings release, “We have converted approximately 75 percent of our Bitcoin purchases into fiat currency as of the end of Q2.” According to the firm, these sales resulted in an increase of $936 million in cash on hand.
Elon Musk, Tesla’s CEO, was a vocal supporter of cryptocurrencies throughout last year’s runup, constantly tweeting about them. A “crypto winter” has seen the price of bitcoin fall by half in the last four months.
As of the first quarter in 2021, the fair market value of Tesla’s bitcoin holdings was at $2.48 billion. When bitcoin began the second quarter at $46,000, the corporation did not reveal how much it sold or how much of a loss it had.
Earlier this week, Barclays’ analyst Brian Johnson estimated that Tesla would suffer a $460 million loss on its bitcoin holdings as a result of the selloff.
We sold a lot of Bitcoin since we did not know when the Covid lockdowns in China would end, so we wanted to make the most of our cash, ,” Musk said in an earnings call on Wednesday. “This should be not taken as some verdict on bitcoin,” adding that Tesla is open to boosting its crypto holdings in the future.
According to an interview with Tesla CEO Elon Musk, bitcoin is “a sideshow to a sideshow” when it comes to a potential inflationary hedge for Tesla’s electric cars.
To put it simply, Tesla explained its choice to invest in bitcoin as one of diversification, diversification, and profiting from its cash reserves in the first quarter of 2021. During the period, the corporation made a profit of $101 million by selling 10% of its stock.
Back then, Kirkhorn said the company intended to “hold what we have long term” and “continue to accumulate Bitcoin from transactions by our customers as they purchase vehicles.” Kirkhorn.
Last year Musk Said For the sake of the environment, Tesla will no longer accept bitcoin for car purchases, although the corporation “will not be selling any bitcoin.” Later, he tweeted that the corporation had “diamond hands” when it comes to bitcoin investing, and he complimented “our master of coin.”