According to a report on the company’s profits that was released on Wednesday, electric vehicle manufacturer Tesla (TSLA) sold bitcoin (BTC) worth $936 million during the second quarter, which is equivalent to selling 75% of its holdings.
The total amount of bitcoin (BTC) held by the corporation at the end of the second quarter was just $218 million, which is a significant decrease from the $1.26 billion held throughout the preceding three quarters.
At the beginning of the quarter, the corporation had a holding of around 42,000 bitcoin; thus, if it sold 75% of that amount for $936 million, it would be equivalent to an average selling price of almost $29,000 per bitcoin. Since the price of bitcoin was about $18,700 when the second quarter came to a close, Tesla was able to avoid recording a significant impairment charge on its holdings by selling earlier in the quarter.
The electric vehicle maker said in February 2021 that it had invested $1.5 billion in Bitcoin, and then in April of the same year, it liquidated 10% of its holding in the cryptocurrency. On Wednesday, Tesla said that the value of its digital assets had decreased to $218 million and that an impairment related to Bitcoin had a negative impact on the company’s profitability during the second quarter.
As a result of the news, the price of bitcoin dropped by around 1.7 percent, reaching $23,300.
In a letter to shareholders that was sent Wednesday as part of the firm’s results report, Tesla said that the business has “converted about 75 percent of our Bitcoin purchases into fiat cash” as of the end of the second quarter. “The cash on our balance sheet increased by $936 million as a result of conversions in the second quarter,” they stated.
Elon Musk has positioned himself as a supporter of cryptocurrencies, and in the last few weeks, he has hinted that his other firm, SpaceX, may follow Tesla in the future in accepting Dogecoin for the purchase of items.
Musk’s support of Bitcoin helped serve as a catalyst for the growth of the digital currency when Tesla temporarily accepted the token as payment for sales. However, the company eventually stopped accepting the payment option, citing worries about the mining activities impact on the environment. During what has been referred to as a “crypto winter,” a hawkish move has been made by one of the most famous bulls in the cryptocurrency market in response to the additional retreat.
Photo: Pixabay.
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